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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

According to classical economists, if saving rises and consumption spending falls, will total spending in the economy decrease? Explain your answer.

To determine

Explain the relationship between saving, consumption and total spending.

Explanation

In classical economy, if saving decreases and consumption increases, then the total spending will not decrease because an increase in saving will decrease the interest rate and stimulate the investment spending...

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