The critical issue for macro stability is whether spending injections will actually equal spending leakages at full employment.

Question

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If spending injections (such as government spending or investment) are greater than spending leakages (such as saving or imports), there will be a stimulus effect on the economy in the short-term, leading to higher output and employment. However, if these injections continue to exceed leakages at full employment, it can lead to inflationary pressures and potentially destabilize the economy. Therefore, the critical issue for macro stability is achieving a balance between spending injections and leakages at full employment.

The Critical Issue for Macro Stability Is Whether Spending Injections