Higher saving is associated with
A)a larger capital stock and a higher standard of living.
B)a larger capital stock but not a higher standard of living.
C)a higher standard of living but not a larger capital stock.
D)neither a higher standard of living nor a higher capital stock.

Question

Quizplus · Accepted Answer

Higher savings allow for greater investment in new capital, which leads to increased productivity and higher output per worker. This ultimately leads to a larger capital stock and a higher standard of living. Therefore, option A is the best choice.

Higher Saving Is Associated with