Unformatted text preview: the benefits are diminished and growth slows. So, while it may take decades to realize, a higher rate of saving leads to temporary growth. Chapter 26 Question 4. What is investment? How is it related to national saving? In the simplest terms, national savings equals national investment or, the more a nation saves the more it has to invest. If Person X saves his/her money and invests in a financial market, individually they would be investing, but adding to the nation’s savings. When Company Y takes Person X’s savings (in the form of an individual investment) they aren’t planning on ‘saving’ it, but will rather ‘invest’ the capitol in new goods and services required by Company Y in order to produce. This adds to the nation’s investment....
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- Spring '12
- Economics, Company Y, Human Capitol