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Write Answer in 'One' Or 'Two' Paragraph.What Are the Determinants of Saving Functions? - Economics

Write answer in 'one' or 'two' paragraph.
What are the determinants of saving functions?
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Solution

 The saving function is primarily derived from the consumption function as the amount of saving is equal to the difference between the income and consumption expenditure. 
Following are a few determinants:

i. Motive of precaution: People save money for the future in order to meet unexpected expenditure. This effects the savings level.

ii. Motive of foresightedness: People cut down their spending in order to meet future requirements for money. For examples, requirements for higher education, marriage, buying a house etc. This increases their savings level.

iii. Motive of enterprise: People prevent current consumption and save for the purpose of investing. Under this motive, people save to invest in a profitable enterprise. 

iv. Motive of calculation: Under this motive, people save to invest in shares and debentures in order to increase their income.

  Is there an error in this question or solution?
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