Discussion Board reply Assignment Example | Topics and Well Written Essays - 250 words - 2

Discussion Board reply - Assignment Example If demand for products is left to virtual shopping estimates only, it would provide biased outcomes that may not reflect actual market behavior and equilibrium. Saving is important for both households and the economy as a whole. A household benefits from savings as it allows a cushion in case of an economic recession. Furthermore, savings allow households to invest in various parts of the economy which aids in increasing the total assets available to a household. On the other hand, the economy stands to benefit from household savings since it allows the government and banks greater liquidity to initiate larger economic projects and hence spur economic growth. In addition, the increased liquidity helps governments to provide better social security nets for the population at large (Gwartney, Stroup, Sobel, & Macpherson, 2011, p. 246). There is no rule of thumb for the proportion a household should save. However, it could be generalized that a household should save enough of its disposable income to allow investment opportunities and to cushion economic shocks whilst not saving too much so as to cause a loss of liquidity in the