answersLogoWhite

0

Because if people aren't getting anything for putting money in the bank, then they won't. And if people aren't putting money into banks, then the banks haven't got any money to lend to people. And if people can't get loans, then they can't buy big things like cars and houses, which are the type of things that makes the whole economy go round.

User Avatar

Wiki User

14y ago

What else can I help you with?

Continue Learning about Economics

Do you want a high or low interest rate in a savings bond?

If you are investing in a savings bond, you wish for it to have a high rate of interest. If you are selling savings bonds, you wish it to be at a low rate of interest.


What is the best conclusion of economic growth and economic development?

i know that as long as the number of birth rate rise, there will be a possible rise also from the population... that's all


What economic strategy does the governmnet use to stimulate savings?

The government would most likely increase taxes if ti wanted to get more savings. Congress has broad taxation powers, and can easily come up with a taxation scheme to boost government revenue.


What is Harrad domar model in economic development?

It is the idea that the economic growth is dependent on capital-output ratio (k, calculated as: Total output produced/total capital invested i.e. efficiency) and the saving ratio of the population. The assumptions it makes are: - Output is a function of capital stock - The marginal product of capital is constant. - Capital is necessary for output - The product of the savings rate and output equals saving which equals investment - The change in the capital stock equals investment minus the depreciation of the capital stock It states that Rate of growth of GDP = Savings ratio/ Capital output ratio.


If Jackson is paid an interest rate of 10 percent on his savings but the inflation rate has risen to 20 percent the purchasing power of his savings is?

If Jackson is earning an interest rate of 10 percent on his savings while the inflation rate is at 20 percent, his purchasing power is decreasing. This is because the inflation rate exceeds the interest rate, resulting in a net loss of value in real terms. Essentially, he is losing 10 percent of the value of his savings each year due to inflation outpacing his interest earnings. Therefore, his savings are effectively becoming less valuable over time.

Related Questions

One economic strategy the government encourages to stimulate savings is?

Raise the interest rate paid on savings and investments.(.Y.)


What are some goals of federal economic policy?

smoothing out business cycle growth low inflation high savings rate


What is the current PurePoint savings rate?

The current PurePoint savings rate is 0.60.


What was the average savings interest rate in 1995 - 2011?

average savings account rate in 1995?


What is the current PurePoint Financial savings rate?

The current PurePoint Financial savings rate is 0.40.


Do you want a high or low interest rate in a savings bond?

If you are investing in a savings bond, you wish for it to have a high rate of interest. If you are selling savings bonds, you wish it to be at a low rate of interest.


What was the average savings interest rate 1993?

The average interest rate on savings accounts is 3.5 to 4%


What is the best conclusion of economic growth and economic development?

i know that as long as the number of birth rate rise, there will be a possible rise also from the population... that's all


How does economics help to improve the world?

it is really that, when you be educated it contributes to increase in literacy rate which contributes to economic development


What economic strategy does the governmnet use to stimulate savings?

The government would most likely increase taxes if ti wanted to get more savings. Congress has broad taxation powers, and can easily come up with a taxation scheme to boost government revenue.


What is the average savings interest rate 2008-2009?

The average savings interest rate in banks is 3.5 to 4%


what does having a savings rate do for you?

Having a savings rate can do alot for you , I would take to a banker about it more to find out if it is suitable for you .