Question

How does a higher level of saving lead to higher GDP in the future?

because a higher national savings rate encourages immigration and expands the labor force

because increased savings will divert money that would be spent on imported goods in the current year

because more capital is available for investment, leading to higher output through capital deepening

because the government taxes savings accounts to pay for education

Answer 1

Because more capital is available for investment, leading to higher output through capital deepening

Answer 2

Because more capital is available leading to higher output through capital deepening

Step-by-step explanation:

When the citizens/residents of a country consume goods and services produced locally in the country they will inevitable add to the GDP growth of the country because finished goods produced and consumed will lead to a higher GDP growth for the economy of the Nation.

When the level of savings by the citizens is on the high there would be more capital available in the next financial year therefore leading to increase in production of goods and service and this will lead to increase consumption of the finished goods therefore increasing the GDP