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What happens if S greater than …

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What happens if S greater than I ?and what happen if S Less than I

    • Posted by Harsh Rawat 6 years, 3 months ago

    CBSE > Class 12 > Economics
    • 3 answers

    Miss Mor 6 years, 3 months ago

    When savings are less than investment..then production is less then the consumption. So firms will increase output by increasing employment leading to the point where S and I are equal. Sorry again fr the last point though

    0Thank You

    Miss Mor 6 years, 3 months ago

    Sry i told the point when savings are more than investment

    1Thank You

    Miss Mor 6 years, 3 months ago

    When savings are less than investment.. it means household and firms consume less while firms produce more...so firms will have more inventory. To reduce their output and clear inventory they will reduce employment upto the level when savings and investment are equal.

    1Thank You

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