What Is Forced Saving?
Compulsory savings is the part of urban and rural residents' savings deposits that are not voluntarily deposited in banks due to savings in life. Usually in a shortage economic environment where the supply and demand in the market is unbalanced, urban and rural residents want to buy but cannot buy suitable goods after receiving income. As a result, the money that should have been used for consumption had to be deposited in the bank. With the development of social productivity and the improvement of market supply capacity, the proportion of such compulsory savings in total bank savings deposits will gradually decline until all disappear. [1]
Compulsory savings
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- Chinese name
- Compulsory savings
- Foreign name
- forced saving
- Definition
- One of the socio-economic effects of inflation
- Subject
- economics
- Compulsory savings is the part of urban and rural residents' savings deposits that are not voluntarily deposited in banks due to savings in life. Usually in a shortage economic environment where the supply and demand in the market is unbalanced, urban and rural residents want to buy but cannot buy suitable goods after receiving income. As a result, the money that should have been used for consumption had to be deposited in the bank. With the development of social productivity and the improvement of market supply capacity, the proportion of such compulsory savings in total bank savings deposits will gradually decline until all disappear. [1]
- Savings law
- Under normal circumstances, the three departments each have their own savings laws: they are formed from their normal income. Savings in the household sector consist of income minus consumption expenditures, corporate savings consist of profits for expansion production and depreciation funds, and the source of government savings. If the government raises taxes to finance production and construction, it is equivalent to the other two sectors Crowding out, the total savings of the whole society does not increase. However, if the government borrows money from the central bank and then issues additional currency, this method of raising construction funds will forcibly increase the investment demand of the whole society, and as a result, prices will rise. Under the condition of constant public nominal income, the actual amount of consumption and savings according to the original model and quantity will decrease correspondingly with the rise in prices, and the decrease will be roughly equivalent to the government's implementation of inflation. Savings part.