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Economic Definition of investment-saving model. Defined.

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Term investment-saving model Definition: A model used in Keynesian economics based on the equality of non-consumption expenditures (or injections) and non-consumption uses of income (leakages). On one side of the equality is saving, taxes, and imports -- the non-consumption leakages. On the other side of the equality is investment, government purchases, and exports -- the non-consumption injections. The investment-saving model provides an alternative to the Keynesian cross for identifying equilibrium aggregate output.

 

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