In a simple economy (no government sector), the equilibrium level of GDP will be less than...

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Question

In a simple economy (no government sector), the equilibrium level of GDP will be less than...

In a simple economy (no government sector), the equilibrium level of GDP will be less than the full employment level of income if, at the full employment level of income, the

a.

saving that consumers want to do is greater than investing that businesses want to do.

b.

saving that consumers want to do is less than investing that businesses want to do.

c.

inventories are being depleted.

d.

saving that consumers want to do is less than spending that consumers want to do.

business economics

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Answer 1

Answer #1

"A"

If the savings in the economy is less than the investment then that will be leakage in the economy and equilibrium GDP will be less than potential GDP.

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Answer 2

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