Question

In: Economics

Is there a difference between private savings and personal savings? Are they interchangeable terms? If they...

Is there a difference between private savings and personal savings? Are they interchangeable terms? If they are different and not interchangeable, what is the differnce between them?

Solutions

Expert Solution

Private savings =  the amount of income that households have left after paying their taxes and paying for their consumption = ( Y - T ) - C

Personal savings = It is the money a person saves in bank account after paying taxes and consumption , or it is the part of disposable income that is saved .

There is one small difference that private savings refers to savings of all households in the economy or total economy's private savings . on the other hand , personal savings is kind of individual savings of a person .

but these terms can be used interchangeably as they mean the same and have same formula .


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