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STatiana [176]
3 years ago
6

It is characteristic of – goods that they are not used up in the short run. A society can choose to – some quality of life now—f

ewer consumer goods—in order to build up its stock of capital goods. This will lead to a –—and more consumer goods—later on.
Business
1 answer:
LenaWriter [7]3 years ago
8 0

Answer:

It is characteristic of CAPITAL goods that they are not used up in the short run. A society can choose to SACRIFICE some quality of life now BY PURCHASING fewer consumer goods ANS SAVING MONEY in order to build up its stock of capital goods. This will lead to a HIGHER QUALITY OF LIFE and more consumer goods PURCHASED AND CONSUMED later on.

Explanation:

A consumer can choose between saving and spending money, that is measured by the marginal propensity to consume or the marginal propensity to save. Money that is spent now, will provide a certain satisfaction in the present, but nothing in the future. Money saved will not provide a certain satisfaction in the present, but should provide much more satisfaction in the future since it should grow as time passes.

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