Question #230140
Why is there a trade-off between the amount of consumption that people can enjoy today and the amount of consumption that they can enjoy in the future? How does saving relate to consumption and
thus to economic growth? Why is the financial sector important in macroeconomics debates?
Expert's answer
This is because investment events tend to increase the future potential output of an economy. However the investment calls for funding through saving that is possible for individuals ready to minimize their present consumption.
The financial sector is important since the future stability of the economy depends on the current investment and savings made by people.
