Regarding the role of saving in economic growth, studies indicate that
A) there is a positive relationship between economic growth and saving.
B) there is no relationship between economic growth and saving.
C) there is a negative relationship between economic growth and saving.
D) there is both a positive and a negative relationship between economic growth and saving.

Question

Quizplus · Accepted Answer

Studies have consistently found that there is a positive relationship between economic growth and saving. When people save, more resources become available for investment in capital goods, such as machinery and equipment, which increase productivity and ultimately lead to economic growth. Additionally, saving helps to facilitate the efficient allocation of resources in the economy by channeling funds from surplus units to deficit units. Overall, higher levels of saving tend to promote economic growth.

Regarding the Role of Saving in Economic Growth, Studies Indicate