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Rank: Advanced Member
Joined: 8/6/2009
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I just stumbled upon the following Q & A in a book, and will be grateful if someone casts more light on the financial reasoning employed in arriving at the answer, and I quote:
"Q: What usually goes hand in hand with inflation, an increase or decrease in savings?
A: A decrease in savings is likely to go hand in hand with inflation as people will have less
money available for savings."
Thanks in advance.
P.S. The book in question is Cambridge's Advanced English Collocation in Use, and the above is merely an exercise in one of its units.
“Did I request thee, Maker, from my clay To mould me Man, did I solicit thee From darkness to promote me?”
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Rank: Advanced Member
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Posts: 71
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Oops, sorry for posting twice, my browser was totally acting up.
“Did I request thee, Maker, from my clay To mould me Man, did I solicit thee From darkness to promote me?”
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Rank: Advanced Member
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vhishious wrote:Oops, sorry for posting twice, my browser was totally acting up. delete one
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Rank: Advanced Member
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Basically, when an economy is in a state of high inflation, you get less for your money. If you need to spend more to get less, you have less money to save.
On the other side, when people save more and spend less, this can create a state of inflation as well.
For example, when George W. Bush issued monies to all tax paying Americans, the hope was that they would spend the money and help stimulate the economy, thus decreasing inflation. The opposite happened, people either saved it or had to spend it on highly inflated gas prices, thus the economy showed zero growth and the dollar continued to inflate.
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Rank: Advanced Member
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Rhondish wrote:Basically, when an economy is in a state of high inflation, you get less for your money. If you need to spend more to get less, you have less money to save.
On the other side, when people save more and spend less, this can create a state of inflation as well.
For example, when George W. Bush issued monies to all tax paying Americans, the hope was that they would spend the money and help stimulate the economy, thus decreasing inflation. The opposite happened, people either saved it or had to spend it on highly inflated gas prices, thus the economy showed zero growth and the dollar continued to inflate. Thanks a lot Rhon, really appreciate it.
“Did I request thee, Maker, from my clay To mould me Man, did I solicit thee From darkness to promote me?”
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Rank: Advanced Member
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Location: Tunisia
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Rhondish wrote:
On the other side, when people save more and spend less, this can create a state of inflation as well.
I think we can’t simply formulate it.
=> On the other side, when people save less and spend more, this is likely to lead to inflation as well.
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