Asked by Raymond Pittman on Jun 17, 2024
Verified
The majority of economists believe that policies that reduce the saving rate will reduce long-run living standards.
Saving Rate
The proportion of disposable income that is not spent on consumption but reserved for future use or investment.
Living Standards
refer to the quality and quantity of goods and services available to individuals or societies, reflecting their economic prosperity and quality of life.
- Evaluate the impact of fiscal policies on savings and long-run living standards.
Verified Answer
BE
Brooke EloraJun 19, 2024
Final Answer :
True
Explanation :
Economists generally agree that higher savings rates contribute to higher investment levels, which in turn fuel productivity improvements and economic growth. Reducing the saving rate can lower the funds available for investment, potentially hindering economic growth and reducing long-run living standards.
Learning Objectives
- Evaluate the impact of fiscal policies on savings and long-run living standards.