How do you define the total savings in the economy?

Question

How do you define the total savings in the economy? What is budget deficit? What can be the result of government deficit?

Expert · Accepted Answer

February 17 Saving, Investment and Economic Growth   Snap Review: The Equality/Duality of Savings and Investment          Y – C – G = I                eqn 1   Now, let’s define a couple of terms:   SprivateY + TR – C – T         eqn. 2   [Sprivateincome + transfer payments (TR) – consumption – taxes (T)]   Public Savings:        S publicT – G – TR              eqn. 3   [Spublictax revenues – government spending – transfer payments]   Total savings in the economy can be defined as:         S = S privateS publicso we add eqns. 2 and 3               S = [Y + TR – C – T ]+ [T – G – TR]    So, cancelling terms, we are left with                S = Y – C – G            eqn. 4  Now, looking at eqn. 1 and 4,                I = Y – C – G

How do you define the total savings in the economy?

Other study guides from
Principles of Macroeconomics econ 202 - abdunasser duella - ECON 202

Others also asked

Discussion and review:

How do you define the total savings in the economy?

How do you define the total savings in the economy?

Other study guides from Principles of Macroeconomics econ 202 - abdunasser duella - ECON 202

Others also asked

Discussion and review:

Other study guides from
Principles of Macroeconomics econ 202 - abdunasser duella - ECON 202