In the Flow of Funds Accounts net current savings for a sector of the economy equals net real investment.

Question

Quizplus · Accepted Answer

In the Flow of Funds Accounts, net current savings for a sector of the economy does not necessarily equal net real investment. Net current savings refer to the excess of current income over current expenditures, while net real investment refers to the sector's expenditure on capital goods minus depreciation. These are related but distinct concepts, as savings can be used for various purposes, not just real investment.

In the Flow of Funds Accounts Net Current Savings for a Sector