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Explain what is meant by “warranted growth”. Will planned investment always equal planned savings?

Explain what is meant by “warranted growth”. Will planned investment always equal planned savings?

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Answer #1

Warranted growth rate is the rate of growth at which the Economy does not expand indefinitely or go in to Recession.

Actual growth is the real rate increase in a country's GDP per year.

Actual savings and actual investments are always equal.

No it is not always equal.

It may or may not be equal.

For Example it is only when exante savings is equal to exante Investment takes place.such Equilibrium is rare because savers and Investors are different people who save and invest with different motives.

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