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…showed last 75 words of 540 total…This is why household savings also grow as income rises. Classical economists believed that the level of private investment depended solely on interest rates while Keynes believed that investment also depended on business expectations. According to Keynes, recessions are caused by not spending enough on goods, while spending too much money on goods causes inflation. Keynes emphasized that the level of investment businesses plan to undertake depends on the expected rate of return. ------------------------------------------------------------------------ **Bibliography**