In a simple economy (without government or foreign trade)where output can be purchased only by consumers or by firms, saving must equal

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Quizplus · Accepted Answer

In the given economy, saving can only be done by consumers or firms. This saving can be used for investment in order to purchase goods and services produced by firms, as there is no foreign trade or government intervention. Hence, saving must equal investment in this economy.

In a Simple Economy (Without Government or Foreign Trade)where Output