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What is the fundamental relationship between savings and investment spending?

The fundamental relationship between savings and investment spending is that savings provide the funds that are used for investment spending. When individuals or businesses save money, these savings can be used by others to invest in projects, businesses, or other opportunities. In this way, savings help to fuel investment spending, which in turn can lead to economic growth and development.


What is the fundamental relationship between savings and investment spending in an economy?

The fundamental relationship between savings and investment spending in an economy is that savings provide the funds that are used for investment spending. When individuals and businesses save money, banks and financial institutions can lend that money to businesses for investment in things like new equipment, technology, and infrastructure. This investment spending helps to drive economic growth and create jobs. In essence, savings fuel investment spending, which in turn stimulates economic activity.


What is the most likely result of an increase in interest rates a. investment spending rises b. investment spending falls c. the economy speeds up d. unemployment falls?

b. investment spending falls


Financial life cycle of an individual?

There are basically three stages . These are ,the accumulation phase, consolidation phase and the spending phaseThe accumulation phaseA stage where individuals accumulates wealth , purchase of shares , ceding of life policies , insurance policies , purchase of fixed assets etcConsolidation phasea stage of strengthening what has been gathered , more of security to assets and life policesSpending phaseThe name suggest , its time to spend , life style is lavish at this stage , going for holidays is more common


Is investment spending flow or stock variable?

Investment spending is a flow variable. It denotes the amount of money spent on purchasing new physical capital or increasing the stock of existing capital during a particular period of time, typically a year. It is different from the stock variable, which represents the total accumulation of physical capital at a given point in time.


What is the private investment multiplier?

the private investment multiplier is the change in national income resulting from a change in private investment spending


What is the crowding out?

A situation when increased interest rates lead to a reduction in private investment spending such that it dampens the initial increase of total investment spending is called crowding out effect


The component of the US GDP are?

I'll give you the expenditure approach Consumption- share of GDP from consumer spending Investment-share from firm investment Government Spending-share of government spending Net Exports (exports-Imports)


What is the crowding-out effect?

A situation when increased interest rates lead to a reduction in private investment spending such that it dampens the initial increase of total investment spending is called crowding out effect


What are four types of spending that represent the AD curve?

Consumption, Investment, Government spending, and Net Taxes


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.


Locating Debt Consolidation Services?

Consumers in the United States have more debt than any other country in the world. Americans love to spend their money and rarely have any extra money laying around. However, when Americans get into debt above their heads, debt consolidation services often help them to escape. Debt consolidation services include budgeting, debt consolidation loans and counseling. Individuals who are trying to escape debt should stop spending money and stick to a planned budget. Next, consolidation loans should be taken out to ensure that individuals are paying more towards debt and less towards interest. Finally, counseling is important to avoid making the same mistakes in the future.