Questions: to the savings-investment spending identity: rum economic growth to occur, savings must be less than investment spending. and investment spending are always equal for the econormy as a whele. un economic growth to occur, savings must be greater than investment spending. un economic growth to occur, savings must equal investment spending.

to the savings-investment spending identity:
rum economic growth to occur, savings must be less than investment spending.
and investment spending are always equal for the econormy as a whele.
un economic growth to occur, savings must be greater than investment spending.
un economic growth to occur, savings must equal investment spending.
Transcript text: to the savings-investment spending identity: rum economic growth to occur, savings must be less than investment spending. and investment spending are always equal for the econormy as a whele. un economic growth to occur, savings must be greater than investment spending. un economic growth to occur, savings must equal investment spending.
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Solution

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The question seems to be about the relationship between savings and investment spending in the context of economic growth. Let's analyze the options provided:

  1. Savings must be less than investment spending for economic growth to occur.

    • This statement is generally incorrect. If savings are less than investment, it implies that the economy is borrowing from abroad, which is not a sustainable model for long-term growth.
  2. Savings and investment spending are always equal for the economy as a whole.

    • This statement is correct in the context of the savings-investment identity in a closed economy. In a closed economy, total savings must equal total investment because all income not consumed is saved and then invested.
  3. Savings must be greater than investment spending for economic growth to occur.

    • This statement is incorrect. If savings are greater than investment, it implies that not all savings are being used for investment, which can lead to underutilization of resources and slower economic growth.
  4. Savings must equal investment spending for economic growth to occur.

    • This statement is correct in the context of a closed economy. For sustainable economic growth, savings should equal investment, ensuring that all saved resources are being used for productive investment.

The answer is the second one: Savings and investment spending are always equal for the economy as a whole. This reflects the savings-investment identity in a closed economy, where all savings are used for investment, facilitating economic growth.

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