FACTORS DETERMINANTS OF SAVING FUNCTION



Meaning: -The saving function is the counterpart of consumption function. Therefore, the factors determining savings are similar to that of consumption function. The factors can be divided into two groups.

Ø  Objective Factors Subjective Factors

I.            Objective factors: -

1.      Level of Income: - saving is the function of income. Normally, other thing remaining same, higher the income, higher would be the saving and vice versa.

2.      Income Distribution: -The pattern of saving is greatly influenced by the pattern of income distribution in the society. If the income is concentrated with few people, then the rate of savings in the society may go up.

3.      Degree of indebtedness: -The savings rate also depends upon the degree of indebtedness. Higher the degree of indebtedness, lower is the propensity to save. This is because; a part of current income goes into repayment of loan and interest payments.

4.      Price Level: -The rate of saving also depends upon the price level in the country. Higher the prices, the more would be the consumption expenditure, and therefore, lower would be the saving rate, and vice-versa.

5.      Rate of interest: -Saving is the function of interest. Higher the rate of interest more is the attraction to save. Therefore, a higher interest rate wold makes people to save more in bank deposits, bonds, etc.


II.            Subjective Factors: -

1.      Tendency to save: -The amount of savings depends upon the tendency to save. There are certain individuals with a high tendency to save, and therefore, their savings rate would be higher.
2.      Precaution Motive:-People may tend to save a part of their income in order to build up reserves against unforeseen situations. Therefore, those individuals who develop a precaution motive tend to save more.

3.      Foresight Motive: - People may tend t save a part of their income for future needs, such as higher education for the children, old age needs, and so on. Therefore, persons who develop foresight motive tend to save more.

4.      Avarice (greed) Motive: -This motive makes people to save more, even at the cost of consumption. People get personal satisfaction in saving more.For example, a miser may save more, even at the cost of consumption.

5.      Motive of Calculation: -People may save more with the intention of earning higher return on accumulated savings. Therefore, current consumption may reduce.


6.      Motive of Pride: - Some people develop a sense of pride by saving more. They boast (show off) of their savings to others. Therefore, they may reduce consumption, and save more.

PDF FILE TO YOUR EMAIL IMMEDIATELY PURCHASE NOTES & PAPER SOLUTION. @ Rs. 50/- each (GST extra)

HINDI ENTIRE PAPER SOLUTION

MARATHI PAPER SOLUTION

SSC MATHS I PAPER SOLUTION

SSC MATHS II PAPER SOLUTION

SSC SCIENCE I PAPER SOLUTION

SSC SCIENCE II PAPER SOLUTION

SSC ENGLISH PAPER SOLUTION

SSC & HSC ENGLISH WRITING SKILL

HSC ACCOUNTS NOTES

HSC OCM NOTES

HSC ECONOMICS NOTES

HSC SECRETARIAL PRACTICE NOTES

2019 Board Paper Solution

HSC ENGLISH SET A 2019 21st February, 2019

HSC ENGLISH SET B 2019 21st February, 2019

HSC ENGLISH SET C 2019 21st February, 2019

HSC ENGLISH SET D 2019 21st February, 2019

SECRETARIAL PRACTICE (S.P) 2019 25th February, 2019

HSC XII PHYSICS 2019 25th February, 2019

CHEMISTRY XII HSC SOLUTION 27th, February, 2019

OCM PAPER SOLUTION 2019 27th, February, 2019

HSC MATHS PAPER SOLUTION COMMERCE, 2nd March, 2019

HSC MATHS PAPER SOLUTION SCIENCE 2nd, March, 2019

SSC ENGLISH STD 10 5TH MARCH, 2019.

HSC XII ACCOUNTS 2019 6th March, 2019

HSC XII BIOLOGY 2019 6TH March, 2019

HSC XII ECONOMICS 9Th March 2019

SSC Maths I March 2019 Solution 10th Standard11th, March, 2019

SSC MATHS II MARCH 2019 SOLUTION 10TH STD.13th March, 2019

SSC SCIENCE I MARCH 2019 SOLUTION 10TH STD. 15th March, 2019.


SSC SCIENCE II MARCH 2019 SOLUTION 10TH STD. 18th March, 2019.

SSC SOCIAL SCIENCE I MARCH 2019 SOLUTION20th March, 2019

SSC SOCIAL SCIENCE II MARCH 2019 SOLUTION, 22nd March, 2019

XII CBSE - BOARD - MARCH - 2019 ENGLISH - QP + SOLUTIONS, 2nd March, 2019

HSC Maharashtra Board Papers 2020

(Std 12th English Medium)

HSC ECONOMICS MARCH 2020

HSC OCM MARCH 2020

HSC ACCOUNTS MARCH 2020

HSC S.P. MARCH 2020

HSC ENGLISH MARCH 2020

HSC HINDI MARCH 2020

HSC MARATHI MARCH 2020

HSC MATHS MARCH 2020

SSC Maharashtra Board Papers 2020

(Std 10th English Medium)

English MARCH 2020

HindI MARCH 2020

Hindi (Composite) MARCH 2020

Marathi MARCH 2020

Mathematics (Paper 1) MARCH 2020

Mathematics (Paper 2) MARCH 2020

Sanskrit MARCH 2020

Sanskrit (Composite) MARCH 2020

Science (Paper 1) MARCH 2020

Science (Paper 2)

Geography Model Set 1 2020-2021

MUST REMEMBER THINGS on the day of Exam

Are you prepared? for English Grammar in Board Exam.

Paper Presentation In Board Exam

How to Score Good Marks in SSC Board Exams

Tips To Score More Than 90% Marks In 12th Board Exam

How to write English exams?

How to prepare for board exam when less time is left

How to memorise what you learn for board exam

No. 1 Simple Hack, you can try out, in preparing for Board Exam

How to Study for CBSE Class 10 Board Exams Subject Wise Tips?

JEE Main 2020 Registration Process – Exam Pattern & Important Dates


NEET UG 2020 Registration Process Exam Pattern & Important Dates

How can One Prepare for two Competitive Exams at the same time?

8 Proven Tips to Handle Anxiety before Exams!

BUY FROM PLAY STORE

DOWNLOAD OUR APP

HOW TO PURCHASE OUR NOTES?

S.P. Important Questions For Board Exam 2021

O.C.M. Important Questions for Board Exam. 2021

Economics Important Questions for Board Exam 2021

Chemistry Important Question Bank for board exam 2021

Physics – Section I- Important Question Bank for Maharashtra Board HSC Examination

Physics – Section II – Science- Important Question Bank for Maharashtra Board HSC 2021 Examination