If income is at a level at which planned saving is greater than planned investment, then:
A) income will rise.
B) income will fall.
C) income will not change, but saving will.
D) investment will rise.

Question

Quizplus · Accepted Answer

When planned saving exceeds planned investment, it indicates that not all income is being cycled back into the economy through consumption or investment. This leads to a decrease in overall demand, which can cause income to fall as businesses reduce output and potentially lay off workers in response to decreased demand.

If Income Is at a Level at Which Planned Saving