Answer to Question #92189 in Macroeconomics for Dibo angell

Question

What is the formula to calculate private and public savings

Answer 1

Public savings equations

The public savings equation tells us how much the government is saving. It is defined as the difference between how much money the government collects in tax revenue (T) minus its spending (G):

Public Savings = T - G

Private savings equation

The private savings equation tells us how much all the people who reside within an economy are saving. Private savings is defined as the total income (Y) (might be referred to as GDP or National income or just Income) minus the tax that they pay (T) and how much of their expenditure is used on consumption (C) :

Private savings = Y - T - C

In essence, private savings is how much income all private citizens have “left over” after they pay their taxes and purchase all the goods they desire.