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SAVING-INVESTMENT MODEL: A model used to identify equilibrium in Keynesian economics based on injections (investment, I) and leakages (saving, S) for the two basic sectors (household and business). Equilibrium is achieved at the intersection of the saving line, S, and the investment line, I.

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PROFIT MAXIMIZATION: The process of obtaining the highest possible level of profit through the production and sale of goods and services. The profit-maximization assumption is the guiding principle underlying short-run production by a firm. In particular, it is assumed that firms undertake actions and make the decisions that increase profit. The profit-maximization assumption is the production counterpart to the utility-maximization assumption for consumer behavior.

     See also | profit | total revenue | total cost | firm | production | short-run production | utility maximization | perfect competition | monopoly | monopolistic competition | oligopoly |


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AVERAGE PROPENSITY TO SAVE

The proportion of household income that is used for saving. The average propensity to save (abbreviated APS) is really nothing more than average saving. Together with the average propensity to consume, it indicates how a given level of income is divided between consumption and saving. A related saving measure is the marginal propensity to save.

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Today, you are likely to spend a great deal of time visiting every yard sale in a 30-mile radius wanting to buy either 500 feet of coaxial cable or a coffee cup commemorating the 1960 Presidential election. Be on the lookout for defective microphones.
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Ragnar Frisch and Jan Tinbergen were the 1st Nobel Prize winners in Economics in 1969.
"Time is the scarcest resource, and unless it is managed nothing else can be managed."

-- Peter F. Drucker

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