Google
Saturday 
October 20, 2018 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
SPECIAL INTEREST GROUP: A group that has more to gain or lose from some candidate, issue, or policy and thus tries extra hard to ensure that the political system is aware of their preferences. Some special interest groups can be fairly tame, merely voting in elections for their chosen candidate, while others are quite active. The more active ones form political action committees and undertake all forms of lobbying (legal and illegal). The ultimate success of special interest groups arises from the inclination of other people to choose rational ignorance and rational abstention.

Visit the GLOSS*arama


SAVING LINE:

A graphical depiction of the relation between household sector saving and income. The saving line is closely related to the consumption line that forms one of the key building blocks for Keynesian economics. A saving line is characterized by vertical intercept, which indicates autonomous saving, and slope, which is the marginal propensity to save and indicates induced saving. The injections-leakages model used in Keynesian economics is based on the saving line.
The saving',500,400)">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.

The purpose of the saving line is to graphically illustrate the basic saving-income relation for the household sector, which is the foundation of the injections-leakages model used in Keynesian economics.

Two basic types of saving are indicated by the saving line. Autonomous saving is the vertical intercept, or Y-intercept, of the saving line. Induced saving is the slope of the saving line. Of no small importance, the slope of the saving line is also the marginal propensity to save (MPS).

Saving Line
Saving Line

A representative saving line is presented in the exhibit to the right. This red 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 two primary characteristics of the saving line are slope and intercept:

  • Slope: The slope of the saving line presented here is positive, but less than one. In fact, the slope of the saving line is numerically equal to the marginal propensity to save. In this case the slope is equal to 0.25. The positive slope reflects induced saving--more income means more saving. It also reflects the basic Keynesian psychological law. Click the [Slope] button to illustrate.

  • Intercept: The saving line intersects the vertical axis at a value of -$1 trillion. This intersection indicates autonomous saving--saving unrelated to income. Autonomous saving is usually negative, indicating dissaving. This occurs because autonomous consumption is positive. Click the [Intercept] button to illustrate.
Note that the level of income (and production) generated by full employment of resources is NOT indicated in this exhibit. Full employment could correspond with $2 trillion of income or $20 trillion. There is no way of knowing. This is particularly important when injections-leakages model, used to identified equilibrium, is derived based on the saving line.

<= SAVING-INVESTMENT MODELSAVING SCHEDULE =>


Recommended Citation:

SAVING LINE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: October 20, 2018].


Check Out These Related Terms...

     | saving schedule | saving function | induced saving | autonomous saving | average propensity to save | marginal propensity to save | consumption line | derivation, saving line | slope, saving line | intercept, 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 | injections-leakages model | aggregate demand | paradox of thrift | fiscal policy | multiplier |


Search Again?

Back to the WEB*pedia


APLS

PURPLE SMARPHIN
[What's This?]

Today, you are likely to spend a great deal of time at an auction looking to buy either a rechargeable flashlight or storage boxes for your computer software CDs. Be on the lookout for the last item on a shelf.
Your Complete Scope

This isn't me! What am I?

The first paper notes printed in the United States were in denominations of 1 cent, 5 cents, 25 cents, and 50 cents.
"Failure is the opportunity to begin again, more intelligently. "

-- Henry Ford, automobile manufacturer

AVC
Average Variable Cost
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 ©2000-2018 AmosWEB*LLC
Send comments or questions to: WebMaster