Question
Which of the following situations will happen if savings
exceed investment in any country at any time?Solution
WhenĀ youĀ increaseĀ yourĀ saving, theĀ national incomeĀ falls rather thanĀ rise. The demand deposits in banks willĀ increaseĀ theĀ national incomeĀ because it is considered as investments. The deposits you keep in banks are actually used for investment by the banks.
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