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Imagine a simplistic economy with homogeneous firms and households. Suppose that there is an exogenous positive saving rate shock, S1>S0. The households lend their extra savings to firms who make an investment and build more capital which allows firms to produce more real GDP. The firms then go to the respective product markets and put that extra GDP on display. In order for firms to pay higher wages to employees and to pay back the principal plus interest to lenders, they need to sell that extra GDP to households. Where do households get extra money to buy that extra gdp if they already ar