When injections into the spending stream are greater than leakages, the level of economic activity will:
A) increase.
B) decrease.
C) increase and then decrease.
D) remain unchanged.

Question

Quizplus · Accepted Answer

When injections into the spending stream (such as investments, government spending, and exports) are greater than leakages (such as savings, taxes, and imports), it leads to an increase in the level of economic activity. This is because more money is being circulated within the economy, stimulating production and consumption.

When Injections into the Spending Stream Are Greater Than Leakages