How do central banks influence interest rates in relation to savings and investments, particularly in contexts of varying interest rate elasticity?

Central banks influence interest rates mainly through their monetary policy decisions, which can encourage or discourage savings and investments. When a central bank lowers interest rates, it makes borrowing cheaper, which can lead to more investments by businesses and consumers. Conversely, higher interest rates can encourage saving because people earn more from their deposits, but it may discourage borrowing and spending. For example, if a central bank lowers rates to stimulate the economy, people might choose to borrow more for a new home or car instead of saving their money. The effect of these changes can vary based on how sensitive people are to interest rate changes; some may change their saving habits significantly, while others may not respond as much.