Inflationary pressure will intensify when the economy is at full employment if leakages from the spending stream are greater than injections.

Question

Quizplus · Accepted Answer

When the economy is at full employment, inflationary pressure intensifies if injections into the economy (such as investments, government spending, and exports) exceed leakages from the spending stream (such as savings, taxes, and imports).

Inflationary Pressure Will Intensify When the Economy Is at Full