Question : Inventory rises above the desired level when
Option 1: Savings is more than investment
Option 2: Savings is less than investment
Option 3: Savings is equal to investment
Option 4: None of the above
Answer (1)
15th Jan, 2024
Correct Answer:
Savings is more than investment
Solution :
When savings is more than investment it means that households are not consuming as much as expected to consume. As a result the inventory rises above the desired level.
Hence, Option A is correct.
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