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Economists Use the Terms Save and Invest in a Way

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Essay

Economists use the terms save and invest in a way that is somewhat different from their common language usage.Explain the special meaning of these terms as used by economists.


Definitions:

Prototype Matching

A cognitive process of comparing a stimulus with a mental representation of the best example of a particular category.

Stencil

A sheet of material with a design cut out of it, used to produce the design on an underlying surface by applying ink or paint through the cut-out areas.

Bottom-Up Processing

A cognitive process by which we analyze information starting with the smallest or most detailed elements and working up to a comprehensive understanding.

Top-Down Processing

An approach to information processing guided by higher-level mental processes as we construct perceptions drawing from our experience and expectations.

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