Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 25 - Part IX - Production and Growth - Questions for Review - Page 545: 4

Answer

High savings will cause fewer resources put towards consumption and more put towards capital goods. Over time higher savings will promote higher standards of living but it is something that is inevitable in the eyes of economists because it requires a long time and this is not a feasible idea, thus.

Work Step by Step

This question asks of the power of savings and how it produces an optimal outcome in the future. Notice that long term causes this to not be feasible.
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