Economics Part A

Capital Investments Constitute a Nations Savings

Capital Investments Constitute a Nations Savings

The residents of a country are able to use economic resources of GDP and surplus imports. A country could devote all of its money to the production of consumer goods, but it usually gives up some consumer goods and instead directs the money toward the creation of capital goods, or capital investment. This sacrifice is called savings. Money is taken from savings to manufacture capital goods. If a country decides to increase its savings, then it can  produce more capital goods and investment.

Uses of the term sources and uses report

When the country imports from abroad, the term sources and uses report is used. When the country does not import from  abroad, the term GDP and its uses is used.

Capital Investments Constitute a Nations Savings521Capital Investments Constitute a Nations Savings