What changes occur if planned savings are greater than planned investment?

Asked by Topperlearning User | 18th Apr, 2016, 02:19: PM

Expert Answer:

The following changes takes place in a situation when planned savings are greater than planned investment:

i. Stocks of the producers would be in excess of the desired limit

ii. Decrease in profit level

iii. Desired level of output will be less in the subsequent year

iv. Level of income and employment will tend to reduce until S = I

Answered by  | 18th Apr, 2016, 04:19: PM