The second definition of investment is San Francisco 49ers legends thank you for the memories shirt. The second definition of savings. Is when instead they put their money in an interest-bearing deposit account. This for-profit investor will want to put their money in the place where they could earn the largest return. Remember for the first type of savings, which equals the first type of investment. Investment is the money, acquired in a previous time period. That is put into the spending in the current time period, which still exists in someone’s pocket at the end of the current time period, as savings. Investment and Savings are always absolutely equal because they are the same money, in the same amount. This equality is always true.
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In the second definition for savings, it is San Francisco 49ers legends thank you for the memories shirt, and that money going into for profit-ventures cannot be the same money. And if we look at it a little closer we cannot be sure that these two amounts are equal, in fact, it is very unlikely that they will be equal. What will tend to equalize, and it’s an equilibrium (not an identity), is the rate of return of money put in a savings deposit and the rate of return of money put into a for-profit venture. This is because the “for profit-investor” will always be seeking the highest return. If the rate of return on for-profit ventures is higher they will put their money there. In so doing the ventures giving the best return will be used up and as better opportunities are gradually used up the rate of return of those remaining available gets lower.