Question

Outline TWO ways a country benefits from the savings of its citizens.

Answer 1

Answer: Saving money is safe advice regardless of the state of Economy.

Explanation: Two ways a country benefits from the savings of its citizens:

• While the risks of inflation are real, when there are high rates of personal savings, there is less need for government stimulus. This is because the nation’s finances are shored up at the consumers level. As with most economic crisis, the national savings rate shot up in the aftermath of the great recession.
• while most Americans know that saving is important, when the economy hits upon tough times, having money in the bank in the form of savings, can be a godsend. Personal savings and not just crucial for individuals financial well-being; at national level, when the rate of personal savings is high, economic recovery tends to be faster.

Answer 2

Countries with higher rates of savings have had a faster economic growth than those with lower saving rates. Capital accumulation creates greater opportunities for production and the productivity of a country by providing an additional income stream for countries like Kosovo.