If saving exceed investment what change will bring about equality in them. class 12. 3marks
Answers
Answer:
Keynes defined saving and investment in such a way that in his theory, saving always equals investment. This is called accounting equality. Accounting equality between saving and investment is also called logical identity. The logic behind this equality is as under.
The national output consists of (i) consumption goods, (ii) investment goods, (O = C + I). In the same way, national income is divided between consumption expenditure and saving (Y = C + S). But we know that by definition O = Y, therefore, C + I = C + S or I = S.
This equality between saving and investment can be expressed in another way also: for example, Keynes defined savings as the excess of income over consumption, i.e., S Y C. Further, investment is the name given to expenditures other than the consumption expenditures, it is nothing but income minus consumption or I= Y- C. Hence S= I (because both are = Y – C).
may this answer can help you
Answer:
by saving we can use it in important purposes
but my investment we tries to use our money for our profit further
Explanation:
so, saving can help in need but investment once done can't guarantee about profit only but in some case about loss to.Using in important need makes a equality in them