contestada

Suppose that society decided to reduce consumption and increase investment. More investment leads to _____ economic growth in the short run. Which of the following statements are true about groups in society that would benefit from or be hurt by this change? A. There might be a transition period in which workers and owners in consumption-good industries would get lower incomes. B. All groups can increase their spending. C. Some people will have higher incomes as the result of faster economic growth. D. There might be a transition period in which workers and owners in investment-good industries would get lower incomes.

Respuesta :

jepessoa

Answer:

Suppose that society decided to reduce consumption and increase investment. More investment leads to LOWER economic growth in the short run.

Which of the following statements are true about groups in society that would benefit from or be hurt by this change?

  • A. There might be a transition period in which workers and owners in consumption-good industries would get lower incomes.

Explanation:

Higher investment levels lead to higher growth rates and productivity in the long run. In the short run, lower consumption levels (most important component of the GDP) will result in lower economic growth.

Consumers either spend or save their money. Spending is given by the marginal propensity to consume (MPC), while saving is given by the marginal propensity to save (MPS = 1 - MPC). Higher savings will always increase a nation's wealth in the long run, but there will be a transition period where the economy will suffer, but that transition period is generally short. The benefits of increased savings offset by far the hardships of decreased spending.

If society decided to reduce consumption and increase investment. It will lead to FASTER economic growth in the short run.

Low Consumption and Higher Investment

This change in Economy, will make faster economic growth in the short run. The reason for this is that increase investment leads to an increase in aggregate demand and an increase in demand will leads to  the growth of economy.

The society will be either hurt or benefited by these changes, depending on the situation. As per the options, people who will be hurt is mention in option A  workers and owners in consumption-good industries would get lower incomes.

People who will get benefit are in the option B, and C.

Learn More about Role of Investment here

https://brainly.com/question/11693020

Otras preguntas