Using the saving/investment approach, when C + I = C + S
A) saving = zero.
B) saving = income.
C) income = consumption.
D) the market is in equilibrium.

Question

Quizplus · Accepted Answer

When C + I = C + S, it implies that all the income is either consumed (C) or saved (S). There is no net saving or borrowing by households and businesses. This is an equilibrium condition where the demand for investment equals the supply of savings. Therefore, the correct choice is D, i.e., the market is in equilibrium.

Using the Saving/investment Approach, When C + I = C