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How does the interest rate affect the consumer`s decision to spend or save ?

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Question added by Mohamed Tarek Wagdy MBA CTP , Head Of Treasury , Medaf Investment
Date Posted: 2014/08/27
طارق محمد احمد قلالوه
by طارق محمد احمد قلالوه , موظف مالي , مؤسسة المواصفات والمقاييس

interest rate is very importanc to " Calculated "cost of capital  

Haseeb Khalid
by Haseeb Khalid , Sales and Promotion Manager. , Medi Urge

if interest rate fall consumer prefer saving instead of spending in order to maintain income from saving returns. Lower interest rate means lower return on saving that ll make cosumer to invest or spend less for future. This is called substitution effect. 

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