Actual saving and actual investment in a two-sector economy

Planned saving and planned investment in a two-sector economy

Actual saving and actual investment in a four-sector economy

Planned saving and planned investment in a four-sector economy

G equals all planned government spending

I equals planned spending on new capital goods

T equals all planned receipts from taxes

C is less than disposable income minus planned saving

Planned spending will be greater than output.

Actual investment will be less than planned investment

Planned investment must exceed planned saving

Output is likely to be increased

The slope of the consumption function at any level of YDIS shows the value of MPCDIS at that level of YDIS

If YDIS in the economy was 1,000 billion dollar a year, planned consumer spending would also equal 1,000 billion dollar a year.

If YDIS in the economy was less than 1,000 billion dollar a year, planned saving would be negative

The consumption function must be a straight line.

A fall in share prices

A fall in interest rates

Expectations that the economy will soon go into a recession

Households deciding to be thriftier