Explain the Importance of Considering Interest Fluctuations in Financial Planning

question 47

Essay

Explain the importance of considering interest fluctuations in financial planning.

---

Definitions:

MPC

Marginal Propensity to Consume, which indicates the proportion of additional income that a household is likely to spend on consumption rather than saving.

Disposable Income

The capital available to households for deploying into savings and spending post-tax.

Consumption

The act of using goods and services by households that leads to a decrease in their stock.

Disposable Income

Budget available for households to direct towards saving and spending post-income tax assessment.