58.1k views
24 votes
The factor that makes national saving equal investment, in equilibrium, is: A. public saving. B. private saving. C. fiscal policy. D. the interest rate.

User Bgshi
by
6.6k points

1 Answer

10 votes

Answer:

D. the interest rate.

Step-by-step explanation:

National saving is defined as the portion of income that is not consumed by the individual or the government.

National savings = public savings + private savings

Usually at equilibrium national savings is assumed to be equal to to investment.

Saved cash is ideally put back into.the economy as investment.

Interest rate plays an important part in making national savings equal to investment.

At high interest rates investments are favoured resulting in equality between national savings and investment

User Herby
by
5.6k points