Assuming there is no government or foreign sector, the economy will be in equilibrium if, and only if, planned investment equals actual investment.

Question

Quizplus · Accepted Answer

In a closed economy without government or foreign sector, equilibrium occurs when planned investment equals actual investment, meaning that what firms intend to invest equals what they actually spend on investment, ensuring that aggregate demand equals aggregate supply.

Assuming There Is No Government or Foreign Sector, the Economy