Saving

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Putting aside some money for unforeseen circumstances or meeting future goals.

What is the definition of saving?

Quote: "Saving is income not spent, or deferred consumption."

What are some methods of saving?

Quote: "Methods of saving include putting money aside in, for example, a deposit account, a pension account, an investment fund, or as cash."

How can saving be achieved by reducing expenditures?

Quote: "Saving also involves reducing expenditures, such as recurring costs."

How does saving differ from investment?

Quote: "In terms of personal finance, saving generally specifies low-risk preservation of money, as in a deposit account, versus investment, wherein risk is a lot higher."

Does saving automatically include interest?

Quote: "Saving does not automatically include interest."

What is the difference between saving and savings?

Quote: "The former refers to the act of not consuming one's assets, whereas the latter refers to either multiple opportunities to reduce costs, or one's assets in the form of cash."

How long does saving occur?

Quote: "Saving refers to an activity occurring over time, a flow variable."

When do savings exist?

Quote: "Savings refers to something that exists at any one time, a stock variable."

What is the relationship between saving and physical investment?

Quote: "Saving is closely related to physical investment, in that the former provides a source of funds for the latter."

What can increased saving contribute to?

Quote: "Saving can therefore be vital to increase the amount of fixed capital available, which contributes to economic growth."

Does increased saving always correspond to increased investment?

Quote: "Increased saving does not always correspond to increased investment."

What can happen if savings are not deposited into a financial intermediary?

Quote: "This means that saving may increase without increasing investment, possibly causing a short-fall of demand rather than economic growth."

What can happen in the short term if saving falls below investment?

Quote: "In the short term, if saving falls below investment, it can lead to a growth of aggregate demand and an economic boom."

How does saving affect future growth?

Quote: "In the long term, if saving falls below investment it eventually reduces investment and detracts from future growth."

What is the role of savings not deposited into a financial intermediary?

Quote: "Savings not deposited into a financial intermediary amount to an (interest-free) loan to the government or central bank, who can recycle this loan."

What is an example of saving in a primitive agricultural economy?

Quote: "In a primitive agricultural economy, savings might take the form of holding back the best of the corn harvest as seed corn for the next planting season."

How would consuming the whole crop affect the economy?

Quote: "If the whole crop were consumed, the economy would convert to hunting and gathering the next season."

What is the purpose of saving seed corn?

Quote: "Saving seed corn for the next planting season."

How does saving impact resource availability for investment?

Quote: "By not using income to buy consumer goods and services, it is possible for resources to instead be invested by being used to produce fixed capital."

What is the result of not saving and consuming all income?

Quote: "Not saving and consuming all income can lead to a short-fall of demand, a cut-back of production, employment, and income, and thus a recession."