investment Theory

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Saving Theory

Saving Theory Definition: Saving is the conservation of money. Methods of saving include putting money aside in a bank or pension plan. Saving also includes reducing expenditures. Saving includes buying securities and deposits money with financial institutions.   Saving function: S = -a + (1 – b)Yd  S = Saving a = autonomous consumption1 - b = MPSYd = disposable income             Average propensity to saving (APS)The average propensity to save (APS), also known as...

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Consumption Theory

Consumption Theory Definition of consumption:·         Measurement on household spending on goods and services.·         Consumption function shows relationship between consumption of households by disposable income an economy.                               C = a + bYd Consumption function; => C= a + bYd                                   ...

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Concepts equilibrium of National Income

Concepts equilibrium of National Income In the simple Keynesian Theory, the concepts of equilibrium is achieved when aggregate demand (AD) equal to aggregate supply (AS).  There are three main sectors in economy; ·                     2 sectors economy·                    ...

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Aggregate Demand (AD) and Aggregate Supply (AS)

Aggregate demand (AD) and aggregate supply (AS) Aggregate demand (AD) and aggregate supply (AS) analysis provide a way of illustrating macroeconomic relationships and the effects of government policy changes. Aggregate Demand Aggregate demand is the total demand for final goods and services in the economy (Y) at a given time and price level. It is the amount of goods and services in the economy that will be purchased at all possible price levels. Aggregate SupplyAggregate supply is the total supply of goods and services produced by a national...

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Method of measuring National Income

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