<p>The GDP, as you implied, is represented as follows</p>

<blockquote>
  <p>Y = C + G + I + nX</p>
</blockquote>

<p>Where <em>Y</em> is the GDP, <em>C and G</em> are private and government consumption, and <em>I</em> is the invest in fixed assets</p>

<p>This formula represents the <strong>demand</strong> for GDP</p>

<p>In a closed market <em>I</em> = <em>S</em> since all savings, for a certain amount of real interest <em>r</em> are allocated to investments in projects that would return <em>r</em> or higher</p>

<p><em>S</em> then is a supply factor for the demand for <em>I</em></p>

<p>In an open market, local savings can be invested abroad and foreign savings can be invested locally, via financial assets</p>

<p>nX are net exports of goods and services, these can be financial or other. tourism is, in a way, an export / import service</p>

CC BY-SA 4.0
2018-09-14T10:57:21.420Z
2018-09-14T10:57:21.420Z
Guy Louzon
<p>While calculating GDP of nation, how personal savings which is not invested in economy or has become part mandatory reserve ratio of government is treated? Similarly do we include import and export of financial asset in Net Exchange(Export - Import)</p>

<macroeconomics><gdp><saving>
GDP Calculation and treatment of Personal Savings
manish
# GDP Calculation and treatment of Personal Savings

(Asked by: username_0 on 2018-08-26)

While calculating GDP of nation, how personal savings which is not invested in economy or has become part mandatory reserve ratio of government is treated? Similarly do we include import and export of financial asset in Net Exchange(Export - Import)

**Tags:** macroeconomics, gdp, saving

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## 1 answers

### Answer by username_1 on 2018-09-14. Score: 1

The GDP, as you implied, is represented as follows

> Y = C + G + I + nX

Where *Y* is the GDP, *C and G* are private and government consumption, and *I* is the invest in fixed assets

This formula represents the **demand** for GDP

In a closed market *I* = *S* since all savings, for a certain amount of real interest *r* are allocated to investments in projects that would return *r* or higher

*S* then is a supply factor for the demand for *I*

In an open market, local savings can be invested abroad and foreign savings can be invested locally, via financial assets

nX are net exports of goods and services, these can be financial or other. tourism is, in a way, an export / import service


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