Which of the following is true of saving and investment?

Question

Quizplus · Accepted Answer

The amount of saving and investment may not be equal because some of the saving may be used for consumption or held as idle cash, while some investment may be financed through borrowing. Option A is incorrect because individuals save for personal reasons such as emergencies and retirement, whereas businesses invest to expand operations and earn profit. Option B is partially correct - savings do provide loanable funds for investment, but investment can also be financed through borrowing. Option C is not entirely true as individuals may save more or less than what their current income allows, and investment may be made using funds from previous savings or borrowing.

Which of the Following Is True of Saving and Investment