Banks' lending capacity increases when savings rate rises. This is the effect of which dimension?

Correct answer: Economic dimension

Direct answer: Option C, the economic dimension. The savings rate shows how much of people’s income is saved rather than spent. These savings are deposited with banks and other financial institutions. Banks can use deposits as a source of funds for loans, while maintaining the required reserves. Thus the chain is: higher savings rate → more deposits available → greater lending capacity → more possible borrowing and investment. Option A, technological dimension, concerns innovations, machines, and production methods, not the amount saved. Option B, social dimension, concerns culture, habits, lifestyle, and population. Saving behaviour can have a social aspect, but the stated result is banking and lending capacity, which is an economic effect. Option C is correct because savings, deposits, credit, and lending are economic variables. Option D, legal dimension, concerns laws and regulations; no rule or compliance issue is mentioned. Exam cue: savings, investment, credit, loans, income, and interest usually indicate the economic dimension.