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The Figure Given Below Represents the Leakages and Injections in an Economy

Question 24

Multiple Choice

The figure given below represents the leakages and injections in an economy.
Figure 10.3
The figure given below represents the leakages and injections in an economy. Figure 10.3    In the figure: S<sub>1</sub> and S<sub>2</sub>: Saving functions I: Investment G: Government spending EX: Net exports -Refer to Figure 10.3. The paradox of thrift might not be a problem if: A)  the average price level does not change in the short run. B)  the I + G + EX line were downward-sloping. C)  the I + G + EX line were constant at an intercept of $30. D)  the increase in saving was used to fund investment expenditures. E)  the I + G + EX line were constant at an intercept of $50. In the figure:
S1 and S2: Saving functions
I: Investment
G: Government spending
EX: Net exports
-Refer to Figure 10.3. The paradox of thrift might not be a problem if:


A) the average price level does not change in the short run.
B) the I + G + EX line were downward-sloping.
C) the I + G + EX line were constant at an intercept of $30.
D) the increase in saving was used to fund investment expenditures.
E) the I + G + EX line were constant at an intercept of $50.

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