Label each description with the appropriate term. Any label can be used more than once, but each description requires only one term. The reward a saver expects on loaned funds: The cost a borrower pays for loaned funds: The difference between the real interest rate and the nominal interest rate: The percentage of disposable income that is kept as personal savings: The term that indicates why most people need to be incentivized to save: The result of consumption exceeding income over a particular period:
Answer Bank
inflation rate
savings rate
interest rate
dissaving
time preferences

inflation rate - The difference between the real interest rate and the nominal. The term that indicates why most people need to be incentivized to save

Inflation rate is the general increase in the price of goods and services within an economy over time. The real interest rate is the nominal interest rate minus inflation rate. Inflation incentivizes people to save, because if they save, they can invest their money at an interest rate higher than inflation, otherwise, their money will end up losing value.

savings rate - The percentage of disposable income that is kept as personal savings

Savings rate is simply the percentage of income that is left for saving. If a person earns 1,000 and saves 200, the savings rate is 20%.

interest rate - The reward a saver expects on loaned funds

The interest rate is the price of borrowing. The loaner accepts to give temporary control of his or her money to another person, in exchange for an extra payment, the interest rate.

dissaving - The result of consumption exceeding income over a particular period

Dissaving occurs when people spend more than they earn. Dissaving can be very harmful not only for household economies, but also for the economy as a whole, because it does not allow investment to flourish, and could lead to actual destruction of wealth via overconsumption.

Tundexi Tundexi · Answer 2 · 2022-03-01T11:38:33+01:00

An inflation rate, savings rate, interest rate, dissaving and time preferences are all important terms in finance field.

What is an inflation rate?

The inflation rate is the difference between the real interest rate and the nominal rate.

What is saving rate?

The savings rate is the percentage of disposable income that is kept as personal savings.

What is an interest rate?

An interest rate is the reward a saver expects on loaned funds

What is dissaving?

A dissaving occurs as a result of consumption exceeding income over a particular period.

What is time preference?

A time preference is a theory that indicates why most people need to be incentivized to save as its explain the time value of money.

In conclusion, the inflation rate, savings rate, interest rate, dissaving and time preferences are all important terms in finance field.