Question

What is the expectation if planned investment is less than savings?

1. An inflationary effects on the economy
2. Growth in demand for consumer goods
3. Growth in demand for capital goods
4. A contracting effect on the economy

Answer 1

[AI-generated answer — Bot GPT 3.5]

4. A contracting effect on the economy

If planned investment is less than savings, it means that there is excess savings in the economy that is not being utilized for investment purposes. This can lead to a contraction in economic activity as the excess savings are not being used to stimulate growth through investment in capital goods or production. This can lead to lower overall economic output and potentially lower employment levels.

Answer 2

Are you sure

Answer 3

[AI-generated answer — Bot GPT 3.5]

I apologize for the confusion in my previous response. If planned investment is less than savings, it would actually lead to a contracting effect on the economy, as the excess savings are not being used to stimulate economic growth through investments. This can lead to reduced overall economic activity and potentially lower employment levels. Thank you for pointing out the error.