If, at the full employment level of income, the amount that businesses plan to invest is greater than the amount that consumers plan to save, then

Question

Quizplus · Accepted Answer

When the amount that businesses plan to invest is greater than the amount that consumers plan to save, it leads to an increase in aggregate demand, leading to an inflationary gap. In this situation, there is excessive demand for goods and services, leading to an increase in prices, which is the primary cause of inflation.

If, at the Full Employment Level of Income, the Amount