Suppose That a Country Has $120 Billion of National Savings

question 25

Essay

Suppose that a country has $120 billion of national savings, and $80 billion of domestic investment. Is this possible? Where did the other $40 billion of national savings go?

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Definitions:

Balanced Scorecard

A strategic planning and management system used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance against strategic goals.

Return on Investment (ROI)

An evaluation metric that assesses the effectiveness or financial gain of an investment by dividing the net earnings by the initial investment cost.

Residual Income

The net operating income that an investment center earns above the minimum required return on its operating assets.

Non-Value-Added Time

Time spent on production or administrative activities that do not contribute to the customer's value perception of the product or service.