All investment must be financed with consumer saving

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Reference no: EM13816737

Suppose that every additional 3 percentage points in the investment (I / GDP) booat GDP growth by 1 percentage point. Assume also that all investment must be financed with consumer saving. The economy is now characterized by

GDP: $10 trillion

Consumption: 9 trillion

Saving: 1 trillion

Investment: 1 trillion

Reference no: EM13816737

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