Skip to main content
Back

Savings Equal Investment definitions

Control buttons has been changed to "navigation" mode.
1/15
  • National Savings
    Total income left after subtracting consumption and government purchases; combines household and government savings.
  • Private Savings
    Household income remaining after paying for consumption and taxes; represents funds available for investment.
  • Public Savings
    Government tax revenue left after government spending; can be positive (surplus) or negative (deficit).
  • Investment
    Resources allocated by firms to increase future output, such as factories or machinery, not financial assets.
  • Closed Economy
    Economic system with no trade with other countries; net exports are zero, simplifying national income calculations.
  • Open Economy
    Economic system that trades with other countries, including exports and imports in national income accounting.
  • Net Exports
    Difference between a country's exports and imports; positive when exports exceed imports, negative otherwise.
  • Net Capital Inflow
    Funds borrowed from abroad to finance domestic investment when imports exceed exports.
  • Budget Surplus
    Situation where government tax revenue exceeds its spending, resulting in positive public savings.
  • Budget Deficit
    Condition where government spending surpasses tax revenue, leading to negative public savings.
  • Expenditure Approach
    Method for calculating GDP by summing consumption, investment, government purchases, and net exports.
  • Gross Domestic Product
    Total market value of all final goods and services produced within a country during a specific period.
  • Consumption
    Spending by households on goods and services, representing a major component of GDP.
  • Government Purchases
    Expenditures by the government on goods and services, excluding transfer payments.
  • Tax Revenue
    Funds collected by the government from households and firms, used to finance public spending.