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Meaning of saving
Types of saving
Factor effecting level of
Meaning of investment
Importance of investment
Factors effecting of
Causes of low rate of
saving & investment in India
Suggestions to increase
Savings are that part of our
income that we do not
S = Y - C
Depositing cash in a safe
Having minimal return and
Short term needs &
To have money available to buy something in the
To have money available for unexpected bills.
To have an income when they retire.
Private saving is the
amount of income that
households have left
after paying their taxes
and paying for their
Public saving is the
amount of tax revenue
that the government has
left after paying for its
Y – T - C T - G
Status in society
Investment means sacrificing some
money value in the present with the
expectation of making gains in the
future. Investment is also known as
Purchase an assets or investment
Having a potential of high return
People invest their money in different ways:
How much money do we need for the investment?
Is there a risk, i.e. could we lose our money?
How easy is it to turn our investment back into cash?
How much can we earn from our investment and is it worth
Buying property ,
e.g. a house to rent
Buying stock and
Setting up a new
Rate of interest
Vicious circle of poverty
Low per capita income
Inflation & lack of demand
Lack of infrastructure
Expansion of banking
Reduction in import
duty for capital
Control on population
1. When opening a restaurant you may need to by ovens, freezers,
tables, and cash registers. Economists call these expenditures
a. capital investment.
b. investment in human capital.
c. business consumption expenditures.
d. None of the above are correct.
2. When a country saves a larger portion of its GDP, it will have
a. less investment, and so have more capital and higher productivity.
b. less investment, and so have less capital and higher productivity.
c. more investment, and so have more capital and higher
d. more investment, and so have less capital and higher productivity.
3. All of the following are high-income countries except
d. South Africa
4. Lucy wants to start her own psychiatric practice, but her expenditures
exceed her income. Lucy is a
a. saver who demands money from the financial system.
b. saver who supplies money to the financial system.
c. borrower who demands money from the financial system.
d. borrower who supplies money to the financial system.
5. All of the following are low-income countries except
a. United Arab Emirates.