Asked by Morgan Brunk on Jun 28, 2024
Verified
A low rate of investment could be explained by a
A) low rate of saving and low interest rates.
B) low rate of saving and high interest rates.
C) high rate of saving and low interest rates.
D) high rate of saving and high interest rates.
Investment
The allocation of resources, usually financial, into assets with the expectation of generating income or profit in the future.
Saving Rate
The proportion of disposable income that is saved by individuals or households over a period, rather than being spent.
Interest Rates
Rates at which interest is charged or paid for the use of money, typically expressed as an annual percentage rate.
- Recognize the components that impact the scale of investments across an economic landscape.
- Analyze the relationship between savings, investment, and economic growth.
Verified Answer
ZK
Zybrea KnightJul 04, 2024
Final Answer :
B
Explanation :
A low rate of investment can be explained by a low rate of saving because there are fewer funds available for investment. High interest rates can also discourage investment because the cost of borrowing funds for investment purposes becomes more expensive.
Learning Objectives
- Recognize the components that impact the scale of investments across an economic landscape.
- Analyze the relationship between savings, investment, and economic growth.