Final answer:
C. more investment, capital growth, and future consumption.
A higher rate of saving should lead to more investment, capital growth, and future consumption. Saving allows for resources to be channeled into investments that drive economic growth and lead to higher future standards of living.
Step-by-step explanation:
A higher rate of saving should lead to more investment, capital growth, and future consumption. This is because saving essentially means setting aside income not spent on current consumption,
which can be used for investment. Investment is crucial as it contributes to physical and human capital development, and technological advancements.
These investments yield returns over time, leading to increased capacity for consumption in the future. When individuals save more, it suggests that they are deferring present consumption for the sake of future benefits.
An increase in saving can also result in a lower interest rate, making lending cheaper and encouraging further investment.
However, too much saving from everyone at once could potentially lead to decreased present consumption that might affect the economy negatively, akin to the paradox of thrift.
Yet, in general, a disciplined approach to saving is among the foundations of economic growth and improved living standards in the long term.