How does the relationship between saving and intended investment affect the economy?
The economy is in equilibrium when saving equals intended investment. When saving exceeds intended
investment, unplanned inventory investment will signal firms to cut production, and employment and
national income will fall. When savings is less than intended investment, unplanned inventory depletion
will signal firms to increase production, and employment and national income will rise.
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Refer to the scenario above. Which of the following is a winning strategy for this game?
A) A strategy to always show a rock B) A strategy to always show a paper C) A strategy to always show scissors D) A random mix of all the three symbols
If incomes were equal in an economy can you think of any other problems that might exist as a result of this equality?
What will be an ideal response?
China has a trade deficit in services, while India has a trade surplus in services
Indicate whether the statement is true or false
When considering her budget, the highest indifference curve that a consumer can reach is the
a. one that is tangent to the budget constraint. b. indifference curve farthest from the origin c. indifference curve that intersects the budget constraint in at least two places. d. None of the above is correct.