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If an Increase in the Level of Investment by Firms

Question 2

Multiple Choice

If an increase in the level of investment by firms results in disequilibrium between injections and withdrawals in the circular flow model:


A) GDP will increase and withdrawals will decrease until J = W
B) GDP will increase and withdrawals will also increase until J = W
C) GDP will decrease and withdrawals will increase until J = W
D) GDP will decrease and withdrawals will also decrease until J = W

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