Here are 4 points from my class.
• Because resources are scarce, devoting more resources to producing capital requires devoting fewer resources to producing goods and services for current consumption.
• Consequently, the accumulation of capital involves a tradeoff.
• When governments encourage saving and investment, they also encourage growth and in the long run this raises the standard of living.
• A well-functioning and carefully regulated financial market, one that quickly and efficiently brings savings and investment together with minimal risk and in a transparent way, is a critical ingredient in the recipe for economic growth.
I can conclude that saving and investment are good for growth, but I cannot tell exactly why. Can someone make it clearer, maybe with a concrete example?