Consider a Keynesian income model without a government sector. In a graph with National income (Y) on the horizontal axis and both (S - I) and (X - M) on the vertical Axis, the graphical relationship between (S - I) and Y would be portrayed as __________, And the graphical relationship between (X - M) and Y would __________.

Question

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In a Keynesian income model without a government sector, the relationship between (S - I) and Y is portrayed as an upward-sloping line because as national income (Y) increases, savings (S) typically increase more than investment (I), leading to a higher (S - I). The relationship between (X - M) and Y is portrayed as a downward-sloping line because as national income increases, imports (M) typically increase more than exports (X), leading to a lower (X - M).

Consider a Keynesian Income Model Without a Government Sector