Question

In: Economics

when wages and salaries account for 75% GDP and consumption spending is 65% of the GDP,...

when wages and salaries account for 75% GDP and consumption spending is 65% of the GDP, what does that mean? if these numbers go higher, what is the implication?

Solutions

Expert Solution

It means that consumption spending being 65% and wages being 75% tells about the spending rate or savings rate of the people where it has to be observed that the spending rate is very high where the savings rate is a bit low when compared to that of countries like China.if the numbers increase, then it means spending increases with the increase in the wages and salaries and they were likely to occupy huge share of the GDP on the whole.


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