It’s interesting to note that one must spend in order to earn. It is evident from the lesson
that a countries GDP is largely influenced by consumer spending and investment spending. I
garnered that private investment spending are funded by people and firms that create physical
capital. This makes it crucial for me, other individuals and firms to allow circulation of funds in
the economy by prioritizing savings over home banking. Similarly, the government can also
cherish the act of saving every time it has surplus after all government transfers have been
effected.
I also learnt that government has a mandate of ensuring there is a balance in the flow of
funds into and outside the country. When there is more funds flowing into the economy
compared to outflow, a positive net capital flow is created. This signifies increased investment in
the economy. In order to maintain this balance, more goods and services should be exported and
less imported into the country.
The lesson also described the financial market. Through it, I can acquire loans from the
savings of households with a purpose of funding my business. It’s worth noting that more cash is