What is the effect of a higher saving rate in the long run?
A) It decreases the capital stock.
B) People must consume less in the future.
C) It increases productivity.
D) It leads to higher growth in real GDP.

Question

Quizplus · Accepted Answer

A higher saving rate can lead to an increase in capital stock, which enhances productivity by providing more resources for investment in capital goods, leading to higher economic output.

What Is the Effect of a Higher Saving Rate in the Long