Suppose americans decide to save more of their incomes. If banks lend this extra saving to businesses, which use the funds to build new factories, this leads to?

Respuesta :

There is a trade-off when individuals save their money, so society is not receiving a free giveaway. The economy benefits from consumers delaying their current wants and saving for the future.This is further explained below.

What is does saving lead to?

Generally,  People's savings are tapped into by banks. In turn, banks provide money to businesses, which then build new factories to increase output. As production capacity increases, so does per capita output, resulting in a quicker rate of product development.

In conclusion, Workers, business owners, and families all get the rewards of greater production.

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