Google
Monday 
November 23, 2020 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
TOTAL REVENUE AND TOTAL COST: A profit-maximizing firm produces output where the difference between total revenue and total cost, that is economic profit, is the greatest. This total revenue and total cost approach to identifying profit-maximizing production can be accomplished using either a table of numbers of a set of curves. However, the end result is the same. Profit-maximizing production takes place at the quantity generating the greatest difference between total revenue and total cost. An added benefit of performing the analysis with curves, however, is the observation that profit-maximizing production occurs where the slopes of the total revenue and total cost curves are equal.

Visit the GLOSS*arama


INTERCEPT, SAVING LINE:

The intercept of the saving line indicates autonomous saving, saving that does not depend on the level of income or production. This can be thought of as the baseline level of saving that would be undertaken if income falls to zero. Autonomous saving is affected by the consumption expenditures determinants, which cause a change in the intercept and a shift of the saving line. The value of the intercept of the saving line is the negative of the value of the intercept of the consumption line.
Saving Line
Saving Line
The saving line, also termed propensity-to-save line or saving function, shows the relation between saving and income for the household sector. The income measure commonly used is national income or disposable income. Occasionally a measure of aggregate production, such as gross domestic product, is used instead.

A representative saving line is presented in the exhibit to the right. This green line, labeled S in the exhibit, is positively sloped, indicating that greater levels of income generate greater saving by the household sector. This positive relation corresponds to the fundamental psychological law of Keynesian economics.

The saving line graphically illustrates the saving-income relation for the household sector, which is the foundation of the leakages line used in Keynesian economics to identify equilibrium income and production.

The intercept of the saving line indicates the intersection point between the saving line and the vertical saving axis. The saving line intersects the vertical axis at a value of -$1 trillion. Theoretically, this is a minimum "baseline" level of saving, the amount of saving undertaken if income falls to zero. This level happens to be negative because consumption exceeds income. More to the point, this intersection indicates autonomous saving--saving unrelated to income. Click the [Intercept] button to illustrate.

Autonomous saving is saving by the household sector that is unrelated to and unaffected by the level of income or production. This is best indicated by a zero level of income. While individuals occasionally come face-to-face with autonomous saving, as their incomes drop to zero due to unemployment, for the aggregate economy autonomous saving is mostly an unlikely theoretical extrapolation.

However, from an analytical perspective, the intercept of the saving line is affected by the consumption expenditures determinants. These are ceteris paribus factors other than income that affect consumption and thus also affect saving, but which are held constant when the saving line is constructed. Any change in these determinants cause the saving line to shift, which necessarily means a new intercept and a new level of autonomous saving.

<= INTERCEPT, NET EXPORTS LINEINTEREST-RATE EFFECT =>


Recommended Citation:

INTERCEPT, SAVING LINE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2020. [Accessed: November 23, 2020].


Check Out These Related Terms...

     | saving line | slope, saving line | consumption line | slope, consumption line | intercept, consumption line | saving schedule | saving function | induced saving | autonomous saving | average propensity to save | marginal propensity to save | derivation, saving line | effective demand | psychological law |


Or For A Little Background...

     | saving | consumption | consumption expenditures | Keynesian economics | macroeconomics | household sector | disposable income | national income | gross domestic product |


And For Further Study...

     | personal consumption expenditures | induced expenditures | autonomous expenditures | aggregate expenditures | aggregate expenditures line | derivation, consumption line | consumption expenditures determinants | Keynesian model | Keynesian equilibrium | leakages | injections-leakages model | aggregate demand | paradox of thrift | fiscal policy | multiplier |


Search Again?

Back to the WEB*pedia


APLS

ORANGE REBELOON
[What's This?]

Today, you are likely to spend a great deal of time at a dollar discount store wanting to buy either a coffee cup commemorating the 2000 Olympics or a birthday gift for your grandmother. Be on the lookout for vindictive digital clocks with revenge on their minds.
Your Complete Scope

This isn't me! What am I?

Three-forths of the gold mined each year is used to manufacture jewelry.
"You are younger today than you will ever be again. Make use of it for the sake of tomorrow. "

-- Norman Cousins, editor

LBO
Leveraged Buyout
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2020 AmosWEB*LLC
Send comments or questions to: WebMaster