Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Consider the country Fancyland
Consider the country Fancyland. The government in Fancyland wants to increase the standard of living for its inhabitants and start a program that incentives families to increase the savings rate from 20% to 50%. Based on economic theory, which of the following statements is correct? Select one alternative: The program is ikely to decrease investments and reduce the capital stock, but may increase the standard of living since consumption is likely to increase. The program is likely to increase investments and thereby the capital stock, but it is not likely to lead to sustained economic growth. The program is not likely to affect investments and therfeore not likely to affect the standard of living The program is likely to increase investments and initialize sustained economic growth that will significantly improve the standard of living
Expert Solution
The programm is likely to increase investment and capital stock but not likely to lead to sustained economic growth becouse an economy can be grown only If all participants perform towards the growth. Here only increasing savings doesn't lead to growth becaouss in that case expenditure suffers. Incomr is same before and after increase in savings there fore increased part of limited resources goes to savings leads to decreases in expenditure and purchasing power of the people.
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
