Question

Which of the following statements is correct for a private, closed economy?
A. Saving equals planned investment only at the equilibrium level of GDP.
B. All levels of GDP where planned investment exceeds saving will be too high for equilibrium.
C. Planned and actual investment are identical at all possible levels of GDP.
D. Saving equals actual investment only at the equilibrium level of GDP.

Answer 1

Answer:

A. Saving equals planned investment only at the equilibrium level of GDP.

Explanation:

A private closed economy is an economy which includes businesses and households , but not government or international trade.

The correct statement among the given statements is saving equal planned investment only at the equilibrium level of GDP.

Hence the answer is option A.