12b) Personal Income = Consumption + ? a) Exports b) Savings c) Capital d) Investment 12c)Fill...

12b) Personal Income = Consumption + ?

a) Exports

b) Savings

c) Capital

d) Investment

12c)Fill in the blanks

Even though Savings isn't in the GDP formula directly: GDP = C + I + NX + G, it can have a long-term benefit to the economy by indirectly affecting the efficacy of all those terms for a long period of time._______________(true, false). We are still benefiting from the past savings and spending of others from 100+ years ago.________________(true, false).

Expert Solution

12b) correct option - b) savings

Personal income can either be consumed or saved. There is no other direct use of it apart from these two.

Therefore, personal income = consumption + savings

Q12C) (i) True

Although saving doesn't enter into GDP formula directly but it have effects on all the components of GDP. Like investment - it is because of savings only required amount of money for investment can be accumulated.

(ii) true.

Because some people long ago saved money and made investment. Many of the corporate house are standing proudly and they have made significant amount of contribution in making of today's economy.

Rahul Sunny answered 2 years ago

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