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Question : Investment and savings are kept equal through a change in the level of 

Option 1: Consumption 

Option 2: Investment 

Option 3: Government expenditure 

Option 4: Income 


Team Careers360 9th Jan, 2024
Answer (1)
Team Careers360 14th Jan, 2024

Correct Answer: Consumption


Solution : Correct Answer is Consumption

By reacting to changes in interest rates, preferred savings and investment are kept equal.Without any desire on the part of the business to increase investment, the change in inventories balances savings and investment. Saving equals investment is a basic tenet of macroeconomic accounting. Savings are, by definition, income less expenditures. Investments must be made in physical assets, not in money.

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