Question

Define the following and give an example on each.

a. National savings

b. investment

Answer 1

Answer:

National savings: national savings are the total savings done in the economy through public savings and private savings or national savings is the addition of public savings and private savings

National income = public savings + private savings

Or

National savings = national income – consumption – government spending

v)Investment: allocating money or spending money on goods and capital which will increase the production level of the firm or their profits.

For example : a business firm bought a modern machine which will increase the production level in the firm.

Investing money income on stocks and funds.