In the neoclassical view of the macroeconomy, any income not used for consumption
A) will be used to pay taxes.
B) will be used for investment.
C) will be used for government projects.
D) will be used for exports.

Question

Quizplus · Accepted Answer

In the neoclassical view of the macroeconomy, any income not used for consumption is assumed to be saved, which is then channeled into investment. This is known as the savings-investment identity, where S = I.

In the Neoclassical View of the Macroeconomy, Any Income Not