If injections exceed leakages,
A)Unemployment will rise.
B)Prices will fall.
C)The economy will expand.
D)Disposable income will fall.

Question

Quizplus · Accepted Answer

When injections (such as government spending or investment) exceed leakages (such as savings or imports), it creates a surplus of income in the economy, which can help to stimulate economic growth and expansion. This is because the increased demand for goods and services leads to an increase in production and employment, therefore reducing unemployment. Prices may also increase, rather than fall, due to increased demand for goods and services. Disposable income may also increase as a result of the expansion.

If Injections Exceed Leakages