What changes occur if planned savings are less than planned investment?
Asked by Topperlearning User | 18th Apr, 2016, 02:19: PM
The following changes takes place in a situation when planned savings are less than planned investment:
i. Current stock of the producers will be sufficient to cope with the level of aggregate demand
ii. As the desired level of stock is not available, the profit will not be maximum
iii. Producers may plan for higher level of output for the subsequent years
iv. Level of output and employment will rise to the equilibrium point
Answered by | 18th Apr, 2016, 04:19: PM
- What is meant by ex-ante saving?
- What is meant by autonomous consumption?
- What is marginal propensity to consume and marginal propensity to save?
- Value of marginal propensity to consume not greater than 1. Why?
- Give the meaning of ex-ante investment.
- What is meant by ex post measures?
- What is planned investment?
- What is ex post saving?
- What changes occur if planned savings are greater than planned investment?
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