Saving and Investment in Closed and Open Economies

These flashcards cover key concepts related to saving and investment in both closed and open economies, including definitions and explanations of wealth, saving rates, government fiscal actions, and trade balances.

Wealth

The amount of assets a person holds minus their liabilities.

Private Saving

The amount saved by individuals from their disposable income after consumption expenditures.

Government Saving

The difference between government tax revenue and government consumption expenditure.

National Saving

The sum of private saving and government saving.

Budget Surplus

Occurs when government tax revenue exceeds government spending.

Budget Deficit

Occurs when government spending exceeds government tax revenue.

Net Exports (NX)

The value of a country's total exports minus its total imports.

Trade Surplus

Occurs when net exports are greater than zero (NX>0).

Trade Deficit

Occurs when net exports are less than zero (NX<0).

Goods Market Equilibrium

The condition in which the total production of goods and services (Y) equals the total demand (C + I + G + NX).