Question

This session's chapter readings discuss different things that will influence people across a national economy to either save or consume (that is, spend) more of their income. In light of current economic conditions in the United States, have you changed your saving or consumption (spending) habits? Give an example from your own experience to illustrate your answer.

Answer 1

Asuming that the capter was about savings and consuption pattern, the answer goes like this.

It is always said the marginal propensity to save (mps) of each individual is different from others. The personality of a person can define how much will he save. The more the risk averse a person is the more he will spend out of his income.

other than this, the culture of the nation, the standard of living and the attitude of the public determines the mps of the individual.

Looking at the current economic conditions in the United States, es I have changed my saving habits. Initially during the great recession 2008 people understood the importance of saving and from there the saving culture improved in the country. But with the fragile ecosystem, wth no certainity of job and invasion of terrorist, the saving culture has improved further.

With the revokcation of major benefits which was offered few years back, and the rising unemployment rate, has led me to improve the saving habit. the more the uncertainity and less that benefits offered to public, the more the public improved the saving habit.