If planned savings are greater than planned investments, what will be its effect on inventories? (2024)

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When planned savings is more than planned investment, then the planned inventory would fall below the desired level. To bring backthe Inventory at the desired level, the producers expand the output. Moreoutput means more income. Rise in output means rise in planned investment and rise inincome means rise in planned savings.

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If planned savings are greater than planned investments, what will be its effect on inventories? (2024)

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