Briefly explain how the miserliness of Ebenezer Scrooge might actually be beneficial for economic growth. 50...

Briefly explain how the miserliness of Ebenezer Scrooge might actually be beneficial for economic growth. 50 words minimum [Hint: Ebenezer Scrooge is someone who is stingy, saves most of his money and doesn't spend money. How is being thrifty beneficial to the economy?]

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Expert Solution

we can derive the benefits of such people as follows-

when a person saves a major portion out of his income this concept is known as PROPENSITY TO SAVE.similarly when the income of a person increases and he saves a larger portion of his income then this is knowns as higher MPS (maginal propensity of consume).
when a person saves a larger portion of amount from his income then he/she can invest this amount into different investment plan and generate more passive income.it would help the corpus to expand its size by reinvestment.
financial institutions would have more loanable funds which would be helpful in credit creation.

Rahul Sunny answered 2 years ago

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