Use the following information to work Problems 6 and 7.
According to OECD data, household saving in Belgium as a percentage of disposable income was on a continuous decrease from 2011 to 2015. It fell from 6.56 percent in 2011 to 5.71 in 2012, to 4.94 in 2013, to 4.61 in 2014, till it reached 4.18 in 2015.
6. What are the implications a saving rate that continues to decrease? Why might a negative saving rate be something to worry about? What can the government do to increase saving?
7. Explain how the decreasing Belgian saving rate affects the market of loanable funds and the equilibrium interest rate.