Question

Future Generations. Some economists say that economic growth involves a​ trade-off between current generations and future generations. If a current generation raises its saving​ rate, what does it​ sacrifice?

Answer 1

The correct answer is: present consumption.

Step-by-step explanation:

In economic theory, the savings rate within a society is determined by the choice between present consumption and future consumption. The Two - Period consumption model suggests that an individual, in order to maximise his or her level of utility, displays a consumption behavior that is subject to current and expected levels of income and is constrained by real interest rate.

The exchange of present consumption for future consumption is called saving.