Briefly Explain What Effect a Reduction in the Saving Rate

question 41

Essay

Briefly explain what effect a reduction in the saving rate will have on growth.

---

Definitions:

Equal Monthly Contributions

Regular, identical payments made monthly towards a financial obligation or investment.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.

Investment Contributions

Money that individuals or entities provide toward investment vehicles for the purpose of accumulation and growth.

Compounded Rate

Refers to the process by which interest is earned on both the initial principal and the interest previously earned.