Total spending in the economy is equal to consumption plus investment plus government spending plus net exports.
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Total spending in the economy is equal to consumption plus investment plus government spending plus net exports. If households want to save and thus do not use all of their income for consumption, what will happen to total spending? Because total spending in the economy is equal to total income and output, what will happen to the output of goods and services if households want to save more?
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If households want to save more and consume less out of their income total spending in the economy w...View the full answer
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