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Question 3 A higher saving rate will lead to increased economic growth because: it coincides with...

Question 3

  1. A higher saving rate will lead to increased economic growth because:

    it coincides with greater labour productivity.

    it means households are earning enough to consume high quality goods and services which give them a high standard of living.

    domestic saving will be used by the government for transfer payments.

    domestic saving is needed to fund domestic investment in new capital.

    domestic saving is used for future consumption.

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Answer #1

domestic saving is needed to fund domestic investment in new capital. - is correct

Increase in investment increases economic growth

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