Summary Background Information Lecture 5

Summary Background Information Lecture 5 - Summary...

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Summary Background Information Lecture 5 1. National saving: the saving of the entire economy, equal to GDP less consumption expenditures and government purchases of goods and services, or Y – C – G 2. Transfer payments: payments the government makes to the public for which it receives no current goods or services in return 3. Private saving: the saving of the private sector of the economy is equal to the after-tax income of the private sector minus consumption expenditures (Y – T – C); private saving can be further broken down into household saving and business saving 4. Public saving: the saving of the government sector is equal to net tax payments minus
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Unformatted text preview: government purchases (T – G) 5. Government budget deficit: the excess of government spending over tax collections (G – T) 6. Government budget surplus: the excess of government tax collections over government tax collections over government spending (T – G); the government budget surplus equals public saving 7. Rate of return: on an investment equals the value of marginal product expressed as a percentage of the purchase price 8. Crowding out: the tendency of increased government deficits to reduce investment spending...
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