If the united states experiences lower personal savings rate then it must be the
ID: 1223948 • Letter: I
Question
If the united states experiences lower personal savings rate then it must be the case that:
a. the federal governemnt is running a budget surplus to make up for the decrease in personal saving
b. the USA is experiencing fast economic growth becuase people are spending a larger portion of their income
c. the USA is experiencing slow economic growth becuase people are spending a larger portion of their income
d. any increase in domestic investment must be financed by foreign funds
e. domestic interest rates are high
Explanation / Answer
If the united states experiences lower personal savings rate then it must be the case that the USA is experiencing fast economic growth becuase people are spending a larger portion of their income. Because when public spends more on consumption they will not have enogh to save. As a result savings fall.