Q.

In the Keynesian two sector economy, AD>AS, then

A. s=i
B. s>i
C. s<i
D. s=0
Answer» C. s<i
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Macro Economics 1

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DDC

Devendra Dev Chaudhari
8 months ago

Can you explain why the savings rate in a Keynesian two sector economy is typically lower than the investment rate when AD exceeds AS?
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