The figure given below represents the leakages and injections in an economy.
Figure 10.2
In the figure:
I, I1: Investment;
G: Government spending;
EX, EX1: Exports;
T: Taxes; and
M: Imports.
-Refer to Figure 10.2. A decline in total injections by $10:
A) will cause equilibrium income to rise to $400.
B) will result in a disequilibrium of $200 in the economy.
C) will cause the total leakages curve to shift inward by $10.
D) will cause equilibrium income to fall to $300.
E) will not affect equilibrium income.
Correct Answer:
Verified
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