Question

Why household savings is important for national gdp?

Answer 1

Answer:

Saving is more important for a household, as some of the options for a household to save helps the economy. In a household, people save money to prepare for future events and unforeseen emergencies. In general, people should set aside money from each paycheck to tap into in case an emergency occurs.

Household savings is defined as the difference between a household's disposable income and its consumption on goods and services. Household savings are important because an economy with low savings rate is unable to fund its investment needs domestically.