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Savings must equal investment because by definition loans (investment that the banks make are taken from savings (bank accounts) from people.
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Why must saving equal planned investment at equilibrium GDP in the private closed economy?
Saving must equal planned investment at equilibrium GDP in the private closed economy because leaking of saving that exceeds the injection of investment causes a level of GDP that cannot be sustained. Having a leaking of saving that is lower than the injection of investment causes the GDP to drive upward. In either case is bad to not have them at equilibrium.
Why does investment spending not equal saving in the circular flow?
In the circular flow, investment spending does not equal saving because goods and services are still needed therefor consumption still requires spending in return pays taxes and companies.
What is goods market equilibrium?
Goods market equilibrium occurs when the amount of desired saving and desired investment are equal, i.e. no unplanned changes in inventory. Both the investment and saving curves are a function of the real interest rate.
Is private saving plus public saving equal to national savings?
yes it does: National Saving or Saving is equal to: Y - C - G = I = S or S = (Y-T-C) + (T-G) where "T" = taxes net of transfers
What will be the effect of an excess of planned investment over saving in a private closed economy with unemployed resources?
I just wasted your time. :)
Why must saving equal planned investment at equilibrium GDP in the private closed economy?
Saving must equal planned investment at equilibrium GDP in the private closed economy because leaking of saving that exceeds the injection of investment causes a level of GDP that cannot be sustained. Having a leaking of saving that is lower than the injection of investment causes the GDP to drive upward. In either case is bad to not have them at equilibrium.
Why does investment spending not equal saving in the circular flow?
In the circular flow, investment spending does not equal saving because goods and services are still needed therefor consumption still requires spending in return pays taxes and companies.
Are mutual funds an investment or saving?
for GDP an investment is saving.
What is goods market equilibrium?
Goods market equilibrium occurs when the amount of desired saving and desired investment are equal, i.e. no unplanned changes in inventory. Both the investment and saving curves are a function of the real interest rate.
Why is a savings account considered a financial investment?
Why is saving considered a financial investment
How do you define is investment an asset or not?
Usually, you make an investment to prepare for the future. If you're saving for something that you NEED, it is. If you're saving for something like a toy, then no.
What has the author Mathew Hauck written?
Mathew Hauck has written: 'Survey reliability and interviewer competence' -- subject(s): Saving and investment 'Survey reliability and interviewer competence' -- subject(s): Saving and investment 'Survey reliability and interviewer competence' -- subject(s): Saving and investment
Which is one of the most stable investment?
U.S. saving bonds
Who should one talk to for help in making an investment plan?
One should talk to an investment expert or an investment company for help in making an investment plan. In economics, investment is related to saving and deferring consumption.
What has the author Peter D Ivory written?
Peter D. Ivory has written: 'National measures of investment and saving reconciled' -- subject(s): Accounting, Flow of funds, Measurement, National income, Saving and investment
What has the author Heidi Hijikata written?
Heidi Hijikata has written: 'The high Japanese saving rate' -- subject(s): Saving and investment
What is mean by saving investment gap?
Its the gap between the actual and potential GNP
