FACTORS WHICH INFLUENCE SAVING FUNCTION

by • 02/07/2011 • B.COM PART 1 EconomicsComments (1)913

  • 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.

  • Wealth:

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.

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One Response to FACTORS WHICH INFLUENCE SAVING FUNCTION

  1. Sikanderlive says:

    B.com part 1

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