Saving money; why?
According to one of the Tend Principles of Economics, people face trade-off, what this means is that in order to gain something, you must give up something else. Saving money is not the exception to the rule, but certainly, it is something worth to analyze in order to understand the opportunity cost that normal people face when they save money. By comprehending the opportunity cost of saving money, it will be a lot easier to understand why it is important to save money and how it is related to many areas of our life. Saving money impacts a huge diversity of areas in society, some of these areas that I am going to analyze are: people perspective of life, financial stability in Macroeconomics, and investment on the future.
Recently, a survey from Ally Bank showed …show more content…
For example, United States is a country which debt is growing, Why is this relevant? Well, when United States borrows money, what it does is to sell bonds to foreign nations, which expect their money back in some fixed amount of time. What happens if the debt keeps growing is that many of these nations start to worry if they will actually recuperate their money and in some way the financial stability is lost. For a country increase its financial credibility, it should expend less than it produces, so it can pays its debt and keep growing. Saving money is also a factor in keeping inflation to a low rate. Inflation, in many cases happens when a country print money without having good and services that support it. U.S’ Government has a goal to increase inflation only 2% per year. If the government does not save money and it has to start printing it, it is possible that we see a increase in inflation rate over the next years. So, as we can see, saving money is a way that governments around the world can keep financial stability and help themselves to overcome economics
According to one of the Tend Principles of Economics, people face trade-off, what this means is that in order to gain something, you must give up something else. Saving money is not the exception to the rule, but certainly, it is something worth to analyze in order to understand the opportunity cost that normal people face when they save money. By comprehending the opportunity cost of saving money, it will be a lot easier to understand why it is important to save money and how it is related to many areas of our life. Saving money impacts a huge diversity of areas in society, some of these areas that I am going to analyze are: people perspective of life, financial stability in Macroeconomics, and investment on the future.
Recently, a survey from Ally Bank showed …show more content…
For example, United States is a country which debt is growing, Why is this relevant? Well, when United States borrows money, what it does is to sell bonds to foreign nations, which expect their money back in some fixed amount of time. What happens if the debt keeps growing is that many of these nations start to worry if they will actually recuperate their money and in some way the financial stability is lost. For a country increase its financial credibility, it should expend less than it produces, so it can pays its debt and keep growing. Saving money is also a factor in keeping inflation to a low rate. Inflation, in many cases happens when a country print money without having good and services that support it. U.S’ Government has a goal to increase inflation only 2% per year. If the government does not save money and it has to start printing it, it is possible that we see a increase in inflation rate over the next years. So, as we can see, saving money is a way that governments around the world can keep financial stability and help themselves to overcome economics