According to the spending balance model, a change in spending causes a change in income, which causes further changes in spending and income.

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According to the spending balance model, a change in spending can cause a change in income through its effect on aggregate demand. As income changes, further changes in spending can occur, leading to a cycle of feedback effects on both spending and income. This is the basis for the multiplier effect and is a key concept in macroeconomics.

According to the Spending Balance Model, a Change in Spending