Answer:
Suppose Americans decide to save less of their incomes, reducing the ability of banks to lend to businesses. With less funds available to businesses, workers will have LESS capital equipment with which to work. This leads to SLOWER growth in productivity.Workers will LOSE from the change in productivity growth because they will produce and earn LESS.
Society can receive a "free lunch" when it builds new factories.??? FALSE
Explanation:
The economy follows a circular flow, where households provide resources (labor and capital) to businesses, and businesses provide goods and services to households.
Households provide money to businesses through investment (through mutual funds, etc.) and bank loans (through depositing money that the bank later loans). If the flow of money to businesses is reduced, then the businesses will not be able to function effectively, reducing productivity, and wages which are paid to households.
There is nothing free in economics, and what allows a business to build a new factory is saved money. That means that households will make more money in the future at the expense of spending less in the present and saving more.
