Question

why saving exceeds planned investment?

Answer 1

The situation when S exceeds I i.e. when withdrawal from the income is greater than injections into the circular flow of income, implies that total consumption expenditure is less than what is required to purchase the available supply of goods and services. In other words, we can understand this as high saving implies low consumption, which means that the output sold (due to low consumption) is less than the planned output. Thus, there exists a portion of produced output that remained unsold, thereby, leading to accumulation of unplanned inventory.