Question: Recent data indicate that Canadians are saving more. Statistics Canada reports that the Household Savings Rate is currently 5.4%, a 0.4% increase from the previous

Recent data indicate that Canadians are saving more. Statistics Canada reports that the Household Savings Rate is currently 5.4%, a 0.4% increase from the previous year. Likewise, a recent Bank of Montreal study found that 48% of Canadians are now investing in Tax-Free Savings Accounts (TFSAs), a 23% increase from 2012.
a. Is investing in TFSAs part of household consumption or saving? Explain your answer.
b. Explain how an increase in saving influences the loanable funds market and its equilibrium.

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