People tend to save more as their income decrease

Savings refer to the portion of income that is not spent.

The aim of investment is to keep the value of money.

Microeconomics refers to government spending and savings.

Households sell labour to businesses.

Firms sell goods and services to households.

Firms sell goods and services to households.

The circular flow of income shows how money move in the economy.

In the market economy, the household is a combination of males and females in the society.

Firms exchange goods for money in the labour market.

Firms acquire labour in the product market.

A market refers to physical places where goods can be purchased, excluding online trade.

Consumer spending refers to the purchase of goods and services in the product market.

Inflation increases consumer spending on products.

At an annual interest rate of 5%, ₦100 this year is worth ₦150 next year.

The money that companies generate from the product market is called revenue.

Cost of production refers to the money that companies spend on factors of production.

A shopping mall is an example of a product market.

The principal is the amount that is borrowed from a lender such as a bank.

The interest is the cost of borrowing money from a financial institution.

Only commercial banks provide credit in the economy.

Corporate organizations provide public goods in the economy.

The marginal propensity to save is the portion of each extra naira of a household's income that's saved.

MPC is the portion of each extra naira of a household's income that is consumed or spent.

Consumer behaviour concerning saving or spending has a very significant impact on the economy as a whole.

Total national saving is measured as the excess of national income over consumption and taxes

An increase in interest rates will lead to positive change in investment.

Investment into creating public goods is corporate investment.

A country’s budget deficit will encourage government saving.

Food and clothing are classified under durable goods.

Increased profit for employers usually affects consumption positively.

The expectation of a future rise in price usually discourages personal consumption.

Personal savings is the least common way of creating bank credit.

An increase in corporate taxes would trim down the consumption of firms.

Government collects taxes from both households and firms.

Saving is important to the economic progress of a country because of its positive relation to investment.

An investment is the purchase of goods that are not consumed today but are used in the future to generate wealth.

National savings divided by national income is the marginal propensity to save.

Changes in savings divided by changes in national income equal marginal propensity to save.

Changes in income divided by saving is the average propensity to save.

If income is ₦100 and savings is ₦30, then APS is 0.3.

If income is ₦50 and savings is ₦10, then APS is 0.5.

If income is ₦2,000 and savings is ₦200, then APS is 0.2.

If income is ₦500 and consumption is ₦500, then APC is 1.0

If income is ₦2,000 and consumption is ₦1,000, then APC is 0.5

MPC + MPS = 1

MPS = 1 - MPC

If MPC is 0.6 then MPS is 0.4

If MPC is 0.2 then APC is 0.8