Gross domestic savings, Macroeconomics

 

Gross Domestic Savings 

Income not devoted to current consumption is saved. In an economy during a particular year some units will consume less than their income while some will spend more than their income. Gross domestic savings is the difference between GDP and aggregate consumption.It is interesting to note that while most of the consumption can be attributed to the household sector, saving is done by various sectors of the economy. This is because part of the income generated in the productive process does not reach the households. Retained profits remain with the business units where they are generated. They constitute part of 'business savings'. Government takes away some income in the form of taxes which constitutes bulk of government revenue. By not spending all of it on current goods and services government can generate savings. Gross Domestic Savings is the total of savings done by all sectors of the economy.The relationship between aggregate savings (S) and income (Y) is known as the saving function, i.e. S = S(Y). Saving may be related to either national or disposable income. The properties of the saving function are the inverse of those of the consumption function, since Y = C + S. 

Posted Date: 9/11/2012 5:41:59 AM | Location : United States







Related Discussions:- Gross domestic savings, Assignment Help, Ask Question on Gross domestic savings, Get Answer, Expert's Help, Gross domestic savings Discussions

Write discussion on Gross domestic savings
Your posts are moderated
Related Questions
Consider the consumption decisions of R.B. Turbo, a new student at T University. Ms. Turbo has only available $1,000 in monthly income to spend on food and housing. In te

For retirement planning, you decided to deposit $1,000 per month and increase your deposit by $100 per month. How much will you have at the end of 10 years if the bank pays 3% annu

Q. Illustrate Biological effects of Ochratoxin? Biological effects: It is associated with the chronic progressive kidney disease in humans known as Balkan endemic nephropathy.

MEC and MEI curvs and their role in economics

Critically examine the statement that privatization can always decentralize economic power.

Differences between absolute advantage and comparative advantage?              Ans) Absolute benefit and comparative benefit are two basic concepts to international trade. Under

HOW TO GET THE REVENUES AND EXPENDITURES AS A PERCENT OF GDP?

Overnight interest rate of Central banks When the central bank buys government securities, it purchases from many individuals, companies and institutions. Deposits and reserves

Q. Overnight rates and interest rates with longer maturity? By controlling overnight interest rates, central bank will affect interest rates with longer maturity. Main reason f

Are there any current subsidy or welfare issues that are being discussed or addressed in parliament or in municipalities