Forced Savings
In economics, forced savings occur when the spending of a person is less than their earnings due to the consumer goods shortages. It can also happen when the available goods are too expensive so that a person who has no access to credit has to accumulate the money for the purchase for a long time.
Forced saving plays an important role in explaining how expansionary monetary policy generates artificial booms.
(b) Compulsory deposits imposed on income tax payers
(c) Provident fund contribution of private sector employees
(d) Reduction of consumption consequent to a rise in prices
Answer: (c) Provident fund contribution of private sector employees
Forced saving plays an important role in explaining how expansionary monetary policy generates artificial booms.
Forced Savings refer to
(a) Taxes on individual income and wealth(b) Compulsory deposits imposed on income tax payers
(c) Provident fund contribution of private sector employees
(d) Reduction of consumption consequent to a rise in prices
Answer: (c) Provident fund contribution of private sector employees
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