1. Higher saving rates result in higher future growth rates because
the banks have more money to distribute to their shareholders.
saving contributes to more investment, which yields a larger capital stock.
saving shifts money from investment to production, yielding a growth in capital stock.
the interest earned from savings provides individuals with more wealth.
2. Which of the following is an example of investment in calculating Gross Domestic Product (GDP)?
an increase of inventory stock in an auto dealership
a purchase of government bonds
a laptop purchased by a student
a deposit of $2,000 in a bank