If in an economy- investment is greater than saving- what is the effect on the national income-

Question

Toppr Admin · Accepted Answer

When investment is more than savings - then the planned inventory rises above the desired level due to less consumption- Therefore to clear the-unwanted increase in inventory- firms plan to reduce the output production in the economy due to which the National Income falls in an economy-xA0-

If in an economy, investment is greater than saving, what is the effect on the national income?

When investment is more than savings , then the planned inventory rises above the desired level due to less consumption. Therefore to clear the unwanted increase in inventory, firms plan to reduce the output production in the economy due to which the National Income falls in an economy.