In classical theory the equality between saving and investment is brought about by:
A)Rate of interest
B)Income
C)Consumption
D)Multiplier

Question

Quizplus · Accepted Answer

The equality between saving and investment in classical theory is primarily brought about by adjustments in the rate of interest. According to classical economics, if there is a discrepancy between saving and investment, the rate of interest will adjust to equilibrate the two, encouraging more investment or saving as necessary.

In Classical Theory the Equality Between Saving and Investment Is