Which best describes how the money that individuals have in savings accounts affects the economy?

A. The money in savings accounts is used for daily expenses like food and gas which keep the economy going.

B. The money in savings accounts just sits in the bank and does not have a great impact on the economy.

C. Savings accounts stop inflation by keeping some money out of circulation.

D. Banks can put the money in savings accounts into circulation by loaning it to others.

I think that tha answer is C.

Nope.

Is it B?

Sorry I meant to write A.

No.

You've had two guesses -- now you're on your own. This site should help you.

http://www.thesimpledollar.com/why-are-savings-account-rates-so-low/

To determine the correct answer, let's look at each option and evaluate its impact on the economy:

A. The money in savings accounts is used for daily expenses like food and gas which keep the economy going.
This option suggests that the money in savings accounts is regularly withdrawn for daily expenses, contributing to consumer spending and overall economic activity. While it is possible for some individuals to use their savings for daily expenses, it does not necessarily apply to all savers. Additionally, this option does not consider the overall impact of savings on the economy.

B. The money in savings accounts just sits in the bank and does not have a great impact on the economy.
This option implies that the money in savings accounts does not actively circulate in the economy, potentially minimizing its impact. However, this option oversimplifies the process as savings deposits are often utilized by banks for lending purposes.

C. Savings accounts stop inflation by keeping some money out of circulation.
This option suggests that savings accounts act as a mechanism to prevent inflation by reducing the amount of money in circulation. While this can be true to some extent, it is not the primary purpose of savings accounts.

D. Banks can put the money in savings accounts into circulation by loaning it to others.
This option recognizes the role of banks in leveraging savings deposits to provide loans, which ultimately increases the money supply and stimulates economic activity. It is worth noting that not all savings are used for lending. However, this option accurately acknowledges the potential impact of savings on the economy.

Considering the explanations provided, option D is the most accurate response. Banks can use the money in savings accounts to lend it to others, thereby putting the funds into circulation and positively impacting the economy.