The savings-investment spending identity says that savings and investment spending are:

Question

Quizplus · Accepted Answer

The savings-investment spending identity states that savings and investment spending in an economy are always equal for the economy as a whole, regardless of government budget deficits or surpluses or trade surpluses or deficits. This is because every dollar saved by one economic unit (such as a household, business, or government) is ultimately invested by another economic unit, leading to a continuous circular flow of funds throughout the economy.

The Savings-Investment Spending Identity Says That Savings and Investment Spending