Brief Principles of Macroeconomics...
Brief Principles of Macroeconomics...
Explain how higher saving leads to a higher standard of living. What might deter a policymaker from trying to raise the rate of saving?
Rate ofsaving and its effect on the standard of living.
Higher saving implies fewer resources are needed to make more consumption goods to produce capital goods. As a result, there is a rise in the capital stock leading to an increase in productivity and thereby, more rapid growth in GDP for a while. The standard of living depends on the GDP and hence in the long...
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