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Mind Back to Attempts: Score /2 2. Problems and Applications 02 Suppose that sod

ID: 1169434 • Letter: M

Question

Mind Back to Attempts: Score /2 2. Problems and Applications 02 Suppose that sodety decided to reduce consurnption and increase investmant Hore investment leads to laster economic growth in the shart rum Which of the following statements are tree about which groups in sedety would benafit or be hurt hom this change? Check all that apply, Scorei 12 might be a transition period in which workers and owners in consumption-good industries would get lower icomes. There might be a transition All groups can increase their spending. Some people wil have higher incomes as the result of faster economic growth. There might be a transition period in which worker, and ownersininvestment "good id stri-would getiww ncome

Explanation / Answer

Ans:

2. From the given situation about the economy, the following inferences can be drawn:

a) There might be a transition period in which workers and owners in the consumption-good industries get lower incomes. This is possible now because of the low demand for consumption goods in the economy. The society has a whole is experiencing lesser consumption now will which now lead to lower demand for consumption goods.

b) Some people may have higher incomes as a result of faster economic growth. The higher investment in the economy will lead to higher incomes for some part of the economy.