(Solved): 2. Given the attached background to a paper, read and write an appropriate proposal in line with th ...

2. Given the attached background to a paper, read and write an appropriate proposal in line with the following: a) Title for the paper b) Problem statement c) General objective d) The specific objectives e) Research questions or hypothesis 1) Rationale (justification) g) Scope and delimitation h) Methodology INTRODUCTION The elasticities of consumption and saving to interest rate depend on the model parameters such as the intertemporal elasticity of substitution. The level of consumption may be interpreted as the result of a decision making process of households over the time structure of the allocation of their income. When interest rate rise, consumption decreases, this means that an important demand component declines. These elasticities have wide ranging implications for monetary policy, business cycles (Plosser and Rebelo, 1988) and tax incentives for saving. In Ghana, people consume wide range of consumables goods ranging from durable and non-durable goods. The levels of income receive from works they undertake influences the level of consumption. Moreover, interest rate on deposit also affects the level of consumption. As most studies have found small effects of interest rates on consumption and saving (Hall, 1988). However, it remains unclear whether interest rate elasticities are truly small or these findings are spurious due to Endogeneity of interest rate (Summers, Hall and Balassa, 1988). Understanding the response of personal consumption to changes in interest rates is central to many issues in economic policy: savings, lending, investment, etc. The central question of this study is, whether income alone explain bulk of the fluctuations in household consumption or there is a role for interest rate movement. By what magnitude does interest rate on deposit changes affect household consumption in Ghana if such an effect exists and of what relevance is this to economic policies in Ghana