Saving is important for economic growth because
A) a higher saving rate reduces investment spending.
B) a higher saving rate increases investment spending.
C) more saving increases consumption immediately.
D) a higher saving rate will decrease the standard of living in the future.

Question

Quizplus · Accepted Answer

An increase in saving means that there is more money available for investment. This can lead to increased investment spending, which can in turn stimulate economic growth. A lower saving rate may lead to less investment spending and slower economic growth. Therefore, higher saving rate increases investment spending and is beneficial for economic growth.

Saving Is Important for Economic Growth Because