Total investment is equal to
A) the saving rate multiplied total saving.
B) the saving rate multiplied by real GDP.
C) the investment rate multiplied by total saving.
D) the consumption rate multiplied by real GDP.

Question

Quizplus · Accepted Answer

Total investment in an economy is typically equal to the amount of savings available for investment, which is often represented as a percentage of real GDP. This is because the saving rate (a percentage) multiplied by the real GDP gives the total amount of savings available for investment, thus equating to total investment. Choices A, C, and D do not accurately describe the standard economic relationship between investment, saving rate, and real GDP.

Total Investment Is Equal to