What is the result when real planned saving exceeds real planned investment spending?
A)The economy is in equilibrium.
B)There is unplanned accumulation of business inventories.
C)There is unplanned depletion of business inventories.
D)Employment expands.

Question

Quizplus · Accepted Answer

When real planned saving exceeds real planned investment spending, it means that households are saving more than businesses are investing. This creates a situation of oversupply, leading to unplanned accumulation of business inventories. To rectify the situation, businesses may reduce production and employment, leading to a slowdown in economic growth.

What Is the Result When Real Planned Saving Exceeds Real