Question

Why are savings important to economic growth? question 10 options: a) savings make american goods more attractive to foreign buyers. b) savings are in place for a "rainy day." c) money spent doesn't grow the economy. d) savings are used to invest in new businesses.

Answer 1

Savings are crucial to economic growth because they are used to invest in new businesses (Option d). This investment fuels economic expansion by facilitating innovation, job creation, and the development of new products and services, ultimately contributing to increased productivity and economic prosperity.

The correct option is D.

Step-by-step explanation:

• Savings serve as a vital source of funding for investments in new businesses, infrastructure, technology, and research and development.

• When individuals or entities save money, financial institutions can lend these savings to entrepreneurs and businesses seeking capital for expansion or innovation.

• Investments financed by savings lead to the creation of new businesses, which generate employment opportunities and contribute to economic output.

• By providing the necessary funds for innovation and growth, savings play a pivotal role in fostering economic development and long-term prosperity.

So, the correct option is d) savings are used to invest in new businesses.