The percentage of a change in income that is devoted to Savings.
i.e. If you increase income by £10, what % goes towards Saving?
-It is 'owed' mostly to us, via our pension funds.
-If the economy grows, the debt-to-GDP ratio will fall (e.g. 1950s-1960s UK)
-As long as we can finance it, it's not such a problem (e.g. Japan)
The responsiveness of one variable to a change in another variable.
Inelastic
Real GDP increases from Y1 to Y2.
Price level increases from PL1 to PL2
-Country A has Comparative Advantage in Good X.
-Country B has Comparative Advantage in Good Y.
(if each country has absolute advantage in exactly one good, it follows that the opportunity cost of producing that good must be lower than that of the other country)
When government tax revenue is greater than government spending.
-Lower interest rates
-Savings decreases
-More confidence
-High profits
-Gains in wealth
-Lower income taxes
-More Government Spending
-Weak currency
-Society attitude toward spending
