do you think increase in MPS should be benificial to the growth of GDP in India?
Dear student,
An increase in MPS means that people save more if their income rises which is good for GDP as people keep their savings in bank and bank in return convert savings into investment by granting loans.
But in our country, India majority of people don't have banking habits, i.e. they keep their savings idle which leads to fall in aggregate demand which is a hurdle for GDP growth in India.
Regards
An increase in MPS means that people save more if their income rises which is good for GDP as people keep their savings in bank and bank in return convert savings into investment by granting loans.
But in our country, India majority of people don't have banking habits, i.e. they keep their savings idle which leads to fall in aggregate demand which is a hurdle for GDP growth in India.
Regards