Solve
Guides
You visited us 0 times! Enjoying our articles? Unlock Full Access!
Question
Open in App
Solution
Verified by Toppr
When investment is more than savings , then the planned inventory rises above the desired level due to less consumption. Therefore to clear theunwanted increase in inventory, firms plan to reduce the output production in the economy due to which the National Income falls in an economy.
Was this answer helpful?
6
Similar Questions
Q
1
If in an economy, investment is greater than saving, what is the effect on the national income?
View Solution
Q
2
Explain the determination of equilibrium level of national income using 'saving and investment approach. Use diagram. Also explain the effects if saving is greater than investment.
View Solution
Q
3
An economy is in equilibrium. Calculate national income from the following:
Autonomous consumption = 100
Marginal propensity to save = 0.2
Investment expenditure = 200
(National Income = 1,500)
View Solution
Q
4
An economy is in equilibrium. Calculate Marginal Propensity to Save from the following :
National Income =1,000
Autonomous Consumption =100
Investment Expenditure =200
View Solution
Q
5
In an economy S = - 50 + 0.5Y is the saving function (where S = saving and Y = national income) and investment expenditure is 7,000. Calculate (i) Equilibrium level of national income. (ii) Consumption expenditure at equilibrium level of national income.
View Solution
