In an economy where net exports are zero, if saving rises in some period, then in that period
A)consumption and investment fall.
B)consumption falls and investment rises.
C)consumption rises and investment falls.

Question

Quizplus · Accepted Answer

In an economy where net exports are zero, if saving rises, it implies that less of the income is being used for consumption, hence consumption falls. The increased saving leads to more funds being available for investment, causing investment to rise.

In an Economy Where Net Exports Are Zero, If Saving