General Knowledge - Indian Economy - Discussion

Discussion :: Indian Economy - Indian Economy (Q.No.37)


If an economy is equilibrium at the point where plans to save and to invest are equal, then government expenditure must be

[A]. zero
[B]. equal to government income
[C]. larger than government income
[D]. negative

Answer: Option B


No answer description available for this question.

Greesh said: (Dec 16, 2011)  
I cannot understand this. Can someone help me out?

Harish said: (Jan 29, 2013)  
Economic equilibrium is a state of the world where economic forces are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. For example, equilibrium occurs at the point at which quantity demanded and quantity supplied are equal. Market equilibrium in this case refers to a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers.

Manisha Khetwal said: (Mar 30, 2013)  
Yes it's true that equilibrium is the state when at a given price n at a given time consumer satisfy his equilibrium position or when his planned saving is equal to the investment. It is a state when investment n saving are in equilibrium position. Any effect will not change equilibrium position.

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