macroeconomics, saving, marginal propensity to consume (and save)
Economics is about the choices that are constantly being made on an international, national, regional and local level by firms, governments, societies and individuals, and as we know each choice is accompanied by a sacrifice of some sort, namely the opportunity cost. In this article I will look at the simple choice faced by everyone who earns income — to spend or to save. Consumption in the UK has been by far the biggest driver of aggregate demand (AD), making up nearly two thirds of total UK demand. Therefore, a knowledge of the balance of income between spending and saving is essential when examining economic performance.
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