Question

c Back to Assignment Attempts Average: /3 10. Problems and Applications Q10 Suppose Americans decide to save more of their incomes, providing banks with more funds to lend to businesses for investment. This allows for faster rowth intherebythe overall standard of living Factory owners willfrom the change in productivity growth because they will receive ar True or False: Society can receive a "free lunch" when it builds new factories Y return on their investments. O True O False

Answer 1

The answer to the first blank is productivity. Reason: With increase in the funds available for the businesses to invest, there is growth in productivity The answer to the second blank is raising. Reason: The higher productivity leads to an increase in the overall standard of living. The answer to the third blank is benefit. Reason: The factory owners will benefit with the overall increase in productivity. The answer to the fourth blank is more Reason: The factory owners will receive a higher return on their investments due to the higher productivity levels. The statement is false. Reason: The society does not enjoy any free lunches, as the new factories are built by curtailing the current period consumption. This helps the society enjoy the benefits in future