ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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People earn interest on the money they save.
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Money saved is money that businesses can borrow to grow.
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Saving allows the government to contribute to retirement funds.
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Saving helps ensure that companies meet payroll.
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Detailed explanation-1: -Saving provides a financial “backstop” for life’s uncertainties and increases feelings of security and peace of mind. Once an adequate emergency fund is established, savings can also provide the “seed money” for higher-yielding investments such as stocks, bonds, and mutual funds.
Detailed explanation-2: -Savings are important determinants of wealth. At the macroeconomic level, governments attach importance to saving money in order to make new investments, to produce new capital goods and to sustain economic growth.
Detailed explanation-3: -Saving is the portion of income not spent on current expenditures. In other words, it is the money set aside for future use and not spent immediately.
Detailed explanation-4: -First and foremost, saving money is important because it helps protect you in the event of a financial emergency. Additionally, saving money can help you pay for large purchases, avoid debt, reduce your financial stress, leave a financial legacy, and provide you with a greater sense of financial freedom.