Saving and Investment Are Often Viewed as Among the Sources

question 126

Essay

Saving and investment are often viewed as among the sources of economic growth.Why are saving and investment more of a challenge in developing countries than in developed countries?

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Definitions:

Average Variable Cost

The total variable costs (costs that change with the level of output) of production divided by the quantity of output produced.

Short Run

A time period in which at least one input is fixed and cannot be changed by the firm, affecting its production decisions.

Purely Competitive Market

Another term for a perfectly competitive market, emphasizing its features like a large number of small firms and identical products.

Marginal Revenue

The increased earnings resulting from the sale of one extra unit of a good or service.