Answer to Question #122365 in Macroeconomics for Chava

Question

Discuss whether a government should encourage an increase in savings.

Answer 1

A given government in a given country should encourage increased savings. Increased savings have several benefits, namely;

- It discourages foreign dominance in terms of investments.

-Economic growth will be experienced because a country's population is likely to exercise saving skills, which in turn are used by lending institutions and purchasing of goods and services, which are key in growth of an economy.

-Lastly,savings ensure enterpreneural growth among a given population.