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In the Simple Keynesian Model, Why Does Actual Investment Spending

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Essay

In the simple Keynesian model, why does actual investment spending have to equal saving in the absence of the government and foreign sectors?
Is this true only for the equilibrium?
Explain.


Definitions:

Dividend Reinvestment Plan

A program that allows investors to automatically reinvest their cash dividends in more shares of the issuing company.

Tax Deferred

A status of investment earnings, such as interest or dividends, that are not subject to tax until they are withdrawn or realized at a future date.

Equity Capital

The funds raised by a company through the sale of common or preferred shares, representing ownership interests in the company.

Floatation Costs

The expenses incurred by a company in issuing new securities, including underwriting, legal, and registration fees.

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