Saving is NOT a problem in the classical model because
A) the classical economists assume that saving was beneficial to people for retirement.
B) saving would be spent by consumers eventually.
C) interest rates are flexible, and savings were channeled into investment.
D) savers and investors are the same people.

Question

Quizplus · Accepted Answer

In the classical model, interest rates are flexible and savings are channeled into investment, ensuring that saved funds are put to productive use in the economy. Therefore, saving is not seen as a problem but rather as a crucial source of investment that fuels economic growth.

Saving Is NOT a Problem in the Classical Model Because