Multiple Choice
Which of the following reflects an accurate economic chain of events?
A) Investment finances savings,which causes the economy to shrink.
B) Savings finances investment,which allows the economy to grow from a larger capital stock.
C) Savings finances future consumption,which allows future production to increase from a larger capital stock.
D) Investment finances future consumption,which allows incomes-and thus savings-to grow.
E) Higher interest rates increase savings,which causes consumption smoothing.
Correct Answer:
Verified
Correct Answer:
Verified
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