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Impact on savings

1. For each of the following events, consider how you might react. What things might you consume more or less of? Would you work more or less? Would you increase or decrease your saving? Are your responses consistent with the discussion of household behavior in this chapter?
a. The price of unleaded gasoline rises to over $4.00 per gallon.
b. Tuition at your college is cut 25 percent.
c. You receive an award that pays you $300 per month for the next 5 years.
d. Interest rates rise dramatically, and savings accounts are now paying 10% interest annually.
e. The prices of food doubles. (If you are on a meal plan, assume that your board charges double.)
f. A new business opens up nearby offering part-time jobs at $20 per hour.

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A My saving will be less as increase in prices of gasoline.
B. My savings will ...

Solution Summary

This discusses the Impact of various events on savings