The distinction between spending balance and equilibrium is important because
A) spending balance encompasses more than equilibrium.
B) consistency of total spending and income is a requirement of equilibrium.
C) spending balance can occur in disequilibrium.
D) spending balance encompasses less than equilibrium.
E) c and d.

Question

Quizplus · Accepted Answer

Spending balance can indeed occur in disequilibrium, meaning that while spending and income might temporarily match, the economy is not in a state of equilibrium due to other factors such as external shocks or adjustments still taking place. Additionally, spending balance encompasses less than equilibrium because equilibrium not only requires a balance of spending and income but also that all other economic factors are in a state of balance, indicating a more comprehensive and stable condition.

The Distinction Between Spending Balance and Equilibrium Is Important Because