ECON 1051 1nd Edition Lecture 44 Outline of Last Lecture I. Financial Systems II. Three Key Services for Savers and Buyers Outline of Current Lecture I. The Macroeconomics of Saving and Investment a. The total value of saving in the economy must equal the total value of investmentCurrent LectureI. The Macroeconomics of Saving and Investment a. The total value of saving in the economy must equal the total value of investmenti. In a closed economy, total amount of funds that firms have for investing should equal to total national savings, or what we save as a nation ii. S=I iii. Total saving in the economy (S) is equal to the sum of private saving and public saving1. S = Sprivate + Spublic a. Private savings are usually positive. b. Public savings are usually negative iv. Typically, government spends more money than it receives, which means that it usually runs a budget deficit, which means usually public savings is negative 1. I = Sprivate + Spublic 2. How’s a budget deficit related to national debt?a. National debt is accumulated over many years. Budget deficit refers to a gap between revenues and spending within a single year These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a
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