Countries that have higher saving rates are likely to have
A)A higher investment rate as a percentage of GDP and a lower growth rate of real GDP.
B)A higher investment rate as a percentage of GDP and a higher growth rate of real GDP.
C)A lower investment rate as a percentage of GDP and a lower growth rate of real GDP.
D)A lower investment rate as a percentage of GDP and a higher growth rate of real GDP.

Question

Quizplus · Accepted Answer

Countries with higher saving rates have more funds available for investments. This leads to higher investment rates as a percentage of GDP, which in turn can lead to higher economic growth rates. This is because investment in new capital goods (such as factories, machines, and infrastructure) can increase efficiency and productivity, resulting in higher output and income levels.

Countries That Have Higher Saving Rates Are Likely to Have