The level of activity in the economy as a whole will remain unchanged if:
A) exports equal imports.
B) saving equals investment.
C) taxes equal government spending.
D) total leakages equal total injections.

Question

Quizplus · Accepted Answer

The level of activity in the economy remains unchanged when total leakages (savings, taxes, imports) equal total injections (investment, government spending, exports) into the economy. This balance ensures that the circular flow of money is maintained, preventing any inflationary or deflationary gaps.

The Level of Activity in the Economy as a Whole