How does private savings impact investment? Why is it important for individuals to save in an economy? How do public policies such as tax policies affect savings rates? How do government budget deficits affect interest rates?
Private savings impact investment because it has to do with how much money is left in a household after paying for taxes and trying to pay for their needs so depending on how much is spent there will be some money that can be invested it is also important for individuals to save the economy because they are the ones that makes the economy work with what they make money on and where they choose to spend that money. The tax policies affect the savings because depending on many things that taxes are put on change how much people spend on things for example in a place has a higher tax rate than a place near by they might loose people because people want to be saving a little more. The government budget deficits affect the rates because it makes them change and go up.
The US is running record budget deficits. Define crowding out. Look for an article talking about it. Do you think it’s a problem? Why or why not?
Crowding out with when goods and services become limited because companies reduce their investments in things for the company due to the fact that the government is spending more raising taxes. https://taxfoundation.org/crowding-out-tax-reform/
Talks about how”Deficits created by tax relief do less damage to private investment than do deficits created by increases in government spending.” meaning that they do work in certain cases and are a good thing when it comes to private investment as oppose to making the government spend more but then that does mean that tax rates are going up.
Macroeconomics 