Leakages are offset by investment and government spending in the circular flow model.
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Q3: Producers will change their prices when GDP
Q4: Investment spending is a leakage from the
Q5: When GDP decreases, consumption spending increases.
Q6: If the economy is suffering a recession,
Q7: Free markets coordinate economic activity in such
Q9: When spending is less than production, inventories
Q10: Injections to the circular flow model include
Q11: When income rises, total expenditures remain constant.
Q12: Equilibrium is the point where total spending
Q13: The expenditure schedule includes the consumption function.
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