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
In a Poisson distribution U=4. A) What is the probability that X=2? B) What is the probability that X is 2?

Q. Explain about Nominal wage level? In macroeconomics, we are usually not interested in the wage for a specific individual though in the average wage for all employed individu

After an oil price shock was impacted upon the other five variables in the model, many interesting results were found. I have already demonstrated that oil Granger causes i

Three defective electric tooth brushes were shipped to a drug store by Clean Brush Products along with 17 non defective ones. A) What is the probability the first two electric t

casual factors of the traditional business cycle and its effect on sectors of the economy?

Assume an economy that is operating above full employment. A. Draw a correctly labeled AD/AS graph showing: i. the problem in the economy ii. current price level and output iii. fu

C=Ca+.95(Y-T) Ca=400-20r T=1200 + .4Y (M/P)^d = .35Y - 5r (M^s/P)=2000 Ip=1500-20r G=2200 NX=500-.06Y a. Compute the multiplier b. Derive the equation for Ap c. Derive the equatio

To determine whether high blood pressure affected whether a person had a stroke, a sample of 300 people who had had strokes are examined. In the sample, 37% had high blood pressure

In order to estimate the VAR, I have firstly to specify the data which will be analysed. As it is my aim to observe the correlations between oil prices and key macroeconomic variab

What are the potential advantages of economic growth? The potential advantages of growth include • More goods and services are accessible to satisfy more want and requireme