I am having a question on how an increase in savings would affect AD. I know that it would decrease consumption and increase investment, but what about the overall shift in AD? I have read somewhere that it would lead to an overall decrease in AD but no one mention why the effect on consumption outweighs that of investment.
I am finally understanding this!
What’s the difference in the wealth effect and consumption spending & the real interest rate effect and changes in Ig
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This is extraordinary
Thanks u always help us for an advice
Amazing video, super helpful. thank you Jason!!
I am having a question on how an increase in savings would affect AD. I know that it would decrease consumption and increase investment, but what about the overall shift in AD? I have read somewhere that it would lead to an overall decrease in AD but no one mention why the effect on consumption outweighs that of investment.
short run decrease in AD, long run increase in AD (I think).
Coz increase in savings decreases consumption expenditure as the income is limited in this way AD decreases may be.....
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Great video. Thanks for sharing!
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ty
Thanks!
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Thank yu sir