Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter ST4, Problem 2CQ
To determine
Effect of savings to an economy.
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Why is savings equal to investment
Discuss five ways which the country can do to increase its savings rate.
Give at least three examples of how savings can be channeled into productive investment. Why is investment so important for an economy? What do you sacrifice when you save today?
Chapter ST4 Solutions
Economics: Private and Public Choice (MindTap Course List)
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- Why is investment is a better option other than savings?arrow_forwardThe typical savings supply curve has a positive slope. If a nation's saving supply curve is perfectly vertical, what would that mean? People in this country save the same amount no matter what the interest rate is. People in this country are extremely sensitive to interest rates when deciding how much to save.arrow_forwardWhich of the following is a major factor in determining an individual's supply of savings? A: Patience B: Investment C: GDParrow_forward
- Why might an investor prefer to invest indirectly rather than directly?arrow_forwardHow does the financial system coordinate saving and investment?arrow_forwardShould governments pay off their debts and not be allowed to borrow any more except under special extreme circumstances (like the current pandemic or if they were at war)? Explain the reasons for your answer clearly.arrow_forward
- empirical evidence that suggest that many consumers tend to spend all of their current disposable income immediately. Is this irrational?arrow_forwardLowering the taxes on income can help in expanding the activities in the financial market. True or False?arrow_forwardExplain the role that financial intermediaries play in an economy by giving a practical example.arrow_forward
- What is the importance of saving? Please write a personal example and a hypothetical example.arrow_forwardTrue or false and why? the paradox of thrift implies that any change in autonomous savings will be neutralised in equilibrium, leaving equilibrium savings and consumption unchanged.arrow_forwardDescribe five ways that will ensure the properly used of accumulated savings by the government.arrow_forward
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