What happens to the level of national income when intended investment is greater than saving?
Answer to relevant QuestionsThe creation of unwanted inventories or the depletion of wanted inventories signals coming changes in the level of national income. Explain. Fill in the missing cells for C, S, and I a in the following table, given that autonomous consumption = $100, MPC = 0.50, and intended investment = $200. Indicate whether the economy is in equilibrium. What is frictional unemployment? Why is it not regarded as a serious economic problem? Explain how interactions of the multiplier and accelerator generate cycles of national income. What is meant by capital deepening? How does it affect labor productivity? Give an example. How does the law of diminishing returns come into play?
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