What is the result when real planned saving is lower than real planned investment spending? A....

What is the result when real planned saving is lower than real planned investment spending?

A. The economy is in equilibrium.

B. There is unplanned accumulation of business inventories.

C. There is unplanned depletion of business inventories.

D. Employment decreases.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Differentiate between planned saving & investment versus actual saving & investment. Explain in 2 separate paragraph

1. Since government spending and planned investment are both fixed variables, what must be true of...

1. Since government spending and planned investment are both fixed variables, what must be true of the aggregate expenditure function? O A. The aggregate expenditure function is horizontal. O B. The aggregate expenditure function is below and parallel to the consumption function. O C. The aggregate expenditure function is above and parallel to the consumption function. O D. The aggregate expenditure function is flatter than the consumption function and intersects it at the equilibrium output level. 2. Expansionary fiscal policy...

If a small open economy reduces defense spending, what happens to saving, investment, the trade balance,...

If a small open economy reduces defense spending, what happens to saving, investment, the trade balance, the world interest rate, and the exchange rate? Assume that initially saving exceeds investment. I want to see two sets of graphs illustrating the effects, Make sure you explain what is going on!

7. What is the result of the spending multiplier if investment comes from savings? 8. Approximately...

7. What is the result of the spending multiplier if investment comes from savings? 8. Approximately how long is the period of the average real-estate-related business cycle?

1. Suppose that Americans decide to increase their saving. As a result, the real interest rate...

1. Suppose that Americans decide to increase their saving. As a result, the real interest rate will (Rise/Fall) , and U.S. net capital outflow will (Increase/Decrease) . 2. If the elasticity of U.S. net capital outflow with respect to the real interest rate is very low, this increase in private saving will have a (Large/Small) effect on U.S. domestic investment. 3. If the elasticity of U.S. exports with respect to the real exchange rate is very high, this increase in...

Given the following information about a closed economy, what is the level of investment spending and national saving, and what is the budget balance?

Given the following information about a closed economy, what is the level of investment spending and national saving, and what is the budget balance? There are no government transfers.GDP: $1,000 million T=$50 millionC=$850 million G=$100 million

The Paradox of Thrift theory states that free marketeers think that saving is better than spending...

The Paradox of Thrift theory states that free marketeers think that saving is better than spending because when people choose to save, the banks will then have more capital to invest in new technologies and even if those technologies may cause unemployment to rise, the decrease in wages will become an incentive for business to hire more employees, causing unemployment rate to fall back. Do you agree with this idea? Why?

If saving is less than domestic investment, then a. there is a trade deficit and Y...

If saving is less than domestic investment, then a. there is a trade deficit and Y > C + I + G. b. there is a trade deficit and Y < C + I + G. c. there is a trade surplus and Y > C + I + G. d. there is a trade surplus and Y < C + I + G Question 49 In the short run, an increase in the money supply causes interest rates to...

True or false? - The investment demand function shows the relationship between investment spending and real...

True or false? - The investment demand function shows the relationship between investment spending and real interest rate - The IS curve consists of every equilibrium spending at each real interest rate - The IS curve represents the combination of GDP and interest rate for which injections and leakages are equal. - If an economy is currently at a point to the left of the IS curve, this means that the aggregate spending is more than the actual output. Therefore,...

True or False? With inflation, LIFO will result in lower lost of sales than FIFO?

Subjects