Introduction

Saving: Activities

1 If saving by households is negative, it implies that all households are dissaving.

Incorrect. The statement is false.

Even if saving by households is negative, some households in the economy might still be saving.

Correct. The statement is indeed false.

Even if saving by households is negative, some households in the economy might still be saving.

2 If saving by households is –R10 million, corporate saving is R25 million and consumption of fixed capital is R5 million, then private saving is …

Incorrect.

Private saving is the sum of saving by households and corporate saving = -R10 million + R25 million = R15 million. Consumption of fixed capital is not part of private saving.

Incorrect.

Private saving is the sum of saving by households and corporate saving = -R10 million + R25 million = R15 million.

Correct.

Private saving is the sum of saving by households and corporate saving = -R10 million + R25 million = R15 million.

3 If a household saves some of their disposable income as part of a retirement annuity, this is called …

Incorrect.

It is part of contractual saving since it is the act of saving against an agreed contract.

Correct.

It is part of contractual saving since it is the act of saving against an agreed contract.

4 If gross domestic product is R100 million, saving by household is R10 million, corporate saving is R25 million, saving of general government is -R8 million and consumption of fixed capital is R3 million, then what is the total saving rate?

Correct.

The total saving rate is gross saving as a percentage of gross domestic product. Gross saving = R10 million + R25 million – R8 million + R3 million = R30 million. Total saving rate = R30 million/R100 million x 100 = 30%.

Incorrect.

The total saving rate is gross saving as a percentage of gross domestic product. Gross saving = R10 million + R25 million – R8 million + R3 million = R30 million. Total saving rate = R30 million/R100 million x 100 = 30%.