Title: Low Savings

Essay Details

Subject: Business
Author: Charles H
Date: January 15, 2016
Level: University
Grade: A
Length: 1 / 273
No of views: 0
Essay rating: good 0, average 0, bad 0 (total score: 0)

Essay text:

That makes it more costly to finance investment in factories, equipment, and other goods, which slows growth in the GDP. The lower savings rate meant a higher consumption rate, which stimulates more spending, more income, and thus more spending, in a self-feeding process known as the multiplier effect...

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They save to spread consumption over their lives. Also the U.S. has a consumer culture, with consumers always having to "keep up with the Joneses" Kids seem entitled to deserving goods that other kids own. Since consumers will be spending more rather than saving, equilibrium GDP will not be balanced...

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