ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Spend or Save? An increase in interest rates may lead consumers to increase savings since they can receive higher rates of return. This is outlined in the marginal propensity to save.

Detailed explanation-2: -Explanation: When the interest rate in the market rises, more individuals or companies start looking for investments to get higher returns. This is because a higher interest rate will certainly provide a higher return on investment.

Detailed explanation-3: -Interest rates can determine how much money lenders and investors are willing to save and invest. Increased demand for loanable funds pushes interest rates up, while an increased supply of loanable funds pushes rates lower.

Detailed explanation-4: -High-yield savings account: A type of savings account that offers a higher yield on the money you keep in your account than traditional savings accounts. Certificate of deposit (CD): A type of savings account that pays interest in exchange for setting aside money for a fixed period.