According to the Keynesian approach, if the level of spending in an economy were $5.5 trillion and the level of output were $5.3 trillion:
A) nonincome-determined spending would be $0.2 trillion.
B) total income-determined spending would be $5.5 trillion.
C) injections into the spending stream would be $0.2 trillion.
D) injections into the spending stream would exceed leakages by $0.2 trillion.

Question

Quizplus · Accepted Answer

In the Keynesian approach, if spending exceeds output, it implies that injections (investment, government spending, and exports) into the economy are greater than leakages (savings, taxes, and imports) by the difference between spending and output. In this case, since spending is $0.2 trillion more than output, injections exceed leakages by $0.2 trillion.

According to the Keynesian Approach, If the Level of Spending