Assertion (A): Ex post saving always equals ex post investment.
Reason (R): Any gap between planned saving and planned investment shows up as an unplanned change in inventories, which is counted in actual investment.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Actual (ex post) values are an accounting identity; planned (ex ante) values need not match.
R explains A.

Concept: Ex post identity
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsPlanned investment; ex ante and ex post

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Ten questions from Aggregate Demand, Consumption & Saving, at your own pace.

Assertion (A): Ex post saving always equals ex post investment.Reason (R): Any gap between planned saving and planned investment shows up as an unplanned change in inventories, which is counted in actual investment.

Explanation

Assertion (A): Ex post saving always equals ex post investment.
Reason (R): Any gap between planned saving and planned investment shows up as an unplanned change in inventories, which is counted in actual investment.