Enter the total GDP, total taxes, and total consumption into the calculator to calculate the private savings.
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Private Savings Formula
The following formula is used to calculate the private savings of a country.
S = GDP - T - C
- Where S is the private citizen’s savings
- GDP is the total gross domestic product
- T is the total tax collected by the government
- C is the total consumption by individuals
To calculate private savings, subtract the total tax collected by the government and the total consumption of individuals from the total GDP.
Private Savings Definition
Private savings is the average amount saved by all private citizens of a given country.
Private Savings Example
How to calculate private savings?
- First, determine the total GDP.
Using available data, determine the total GDP of a given country.
- Next, determine the total taxes.
Calculate the total taxes collected by the government of the same country.
- Next, determine the total consumption.
Calculate the total consumption of all citizens of the country.
- Finally, calculate the private savings.
Calculate the private savings by subtracting the taxes and consumption from the GDP.
Private savings is the maximum amount of savings all of the private individuals of a country can save. In essence, it’s the total GDP minus the total taxes and total consumption, which makes logical sense. How much any individual can save is equal to their income minus taxes and spending.