a higher saving rate leads to a group of answer choices larger capital stock and a higher level of output in the long run higher rate of economic growth in the short run but a decline in the long run. higher rate of economic growth only in the long run. a higher rate of depreciation and lower long run output.

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06-12-2022
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a higher saving rate leads to a group of answer choices larger capital stock and a higher level of output in the long run higher rate of economic growth in the short run but a decline in the long run. higher rate of economic growth only in the long run. a higher rate of depreciation and lower long run output.

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Qwline Qwline · Answer 1 · 2022-12-12T17:13:35+01:00

A higher saving rate leads to a: A) larger capital stock and a higher level of output in the long run.

One of the economic indicators eagerly awaited by economists and industry is the gross domestic product and gross national product numbers released by the government. These forms base their investment decisions on these indicators.

The gross national product can be summarized in the following equation

GNP = C (Consumption) + S (Savings) + T (Taxes)

The income generated by factors of production by providing services will be spent on consumption and paying taxes, and the amount left is savings. The national savings of the economy is the sum total of savings of householders, firms, and the government.

The flow of national savings will be converted into investments or the accumulation of physical capital( assets) that will be used to manufacture goods. The gestation period of accumulation of assets for commercial production takes time, hence a higher level of output will be generated in the long run.

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