According to Keynesian economics, the economy is in equilibrium when:
A) injections into the spending stream equal leakages from the spending stream.
B) total spending on new goods and services is greater than the total output of the economy plus imports.
C) the amount spent by households on goods and services equals the amount spent by businesses, government units, and foreign buyers.
D) all of the above.

Question

Quizplus · Accepted Answer

Keynesian economics posits that the economy is in equilibrium when injections into the spending stream (such as investments, government spending, and exports) equal leakages from the spending stream (such as savings, taxes, and imports). This balance ensures that the aggregate demand matches the aggregate supply, stabilizing the economy.

According to Keynesian Economics, the Economy Is in Equilibrium When