Question

According to the savings–investment spending identity:
a) savings equals investment spending.
b) savings equals investment spending plus consumption spending.
c) government spending equals tax receipts.
d) total income equals consumption spending plus savings.

Answer 1

Answer:

a) savings equals investment spending.

Explanation:

Savings is the part of the income that is not used and investment is money that is spent on capital. Savings-investment spending identity is a concept that says that the amount saved in an economy equals the amount invested. This because investments depend on the amount of savings available.