- Effects of Changes In Expected Future Income:
Anticipation of future income raises the current consumption, so the desired saving will decreases as future income increases.
When wealth is increases some of the extra wealth is consumed which reduces the savings.
- Government Purchases:
When government purchases increases desired national savings falls. Because higher government purchases directly lower the desired national saving.
- The Rate Of Interest:
Higher interest rates result in greater savings and lower interest rates inclines people to consumer rather than to save.
- Liquidity Preference:
Is people prefer to keep their income liquid form, saving is increased correspondingly.
- Future Needs:
If future needs such as old age security, children education, their marriages and construction house etc are more than present savings will be more.