Saving investment and inflation?

Question

Pls tell me if the statement below is true, false or ambiguous and reasons for your answers. the better the explaination the more points..thnx

In a closed economy, saving and investment are only equal when inflation is at the target rate of inflation.

Answer 1

The statement is ambigous. For , in the expost sense, Saving will always be equal to Investment. When actual inflation is different from taget inflation, the expost investment may differ from ex-ante planned investment to the extent of actual iiventories being higher or lower than the planned inventory. Deviations from target inflation means that the agreegate demand will be either higher or lower than the aggregate supply : so there will be either un unplanned drawing down of inventories from planned level or an excess inventory over the planned level. But actual investment will be equal to actual savings as this is a macro economic identity for a closed economy where foreign savings  cannot supplement domestic savings or part of the domestic savings can be invested abroad.