Exhibit 10-1

-In Exhibit 10-1, given that leakages must equal injections in equilibrium, which of the following is true?
A)S + NT + NX = G + I
B)S = I
C)C + S = G + I
D)S + NT = NX + G + I
E)the answer is indeterminate

Question

Exhibit 10-1
 
-In Exhibit 10-1, given that leakages must equal injections in equilibrium, which of the following is true?
A)S + NT + NX = G + I 
B)S = I 
C)C + S = G + I 
D)S + NT = NX + G + I 
E)the answer is indeterminate

Quizplus · Accepted Answer

Injections include government spending (G), investment (I), and net exports (NX), while leakages include savings (S), taxes (T), and imports (M). Therefore, the equation for injections minus leakages must be equal to zero for equilibrium to hold, which is expressed as: G + I + NX = S + T + M. Since imports (M) are not given in the options, we can substitute M with net imports (NX), which is equal to exports (X) minus imports (M). Rearranging the terms, we get: S + T + NX = G + I, which is option (D).

Exhibit 10-1 -In Exhibit 10-1, Given That Leakages Must Equal Injections in Must