According to Keynes, an increase in saving and a decrease in consumption may lower total spending in

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According to Keynes, an increase in saving and a decrease in consumption may lower total spending in the economy.

But how could this happen if the increased saving lowers interest rates (as shown in the last chapter)?

Wouldn’t a decrease in interest rates increase investment spending, thus counteracting the decrease in consumption spending?

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Macroeconomics

ISBN: 9780324785500

9th Edition

Authors: Roger A. Arnold

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Question Posted: Nov 01, 2024 05:00 AM

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According to Keynes, an increase in saving and a decrease in consumption may lower total spending in

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Macroeconomics

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