A lower rate of savings should lead to

Question

Quizplus · Accepted Answer

When the rate of savings is lower, there will be less investment in the economy, leading to a decrease in capital growth and future consumption. Therefore, option C is the most appropriate. Option A is incorrect because lower savings may lead to higher current consumption as people spend more and save less. Option B is also incorrect because decreased savings may lead to a decline in investment and, hence, less growth. Option D is also wrong because the lower rate of savings will not increase the price level directly.

A Lower Rate of Savings Should Lead to