refer to the following diagram:

-If flow 2 increases,then the unemployment rate will go _____; if flow 6 decreases,then the unemployment rate will go _____.

Question

refer to the following diagram:

-If flow 2 increases,then the unemployment rate will go _____; if flow 6 decreases,then the unemployment rate will go _____.

Quizplus · Accepted Answer

Flow 2 represents government spending, which is an injection into the economy. An increase in injection will lead to an increase in aggregate demand, leading to an increase in output and employment. Therefore, if flow 2 increases, the unemployment rate will go down.
Flow 6 represents leakages such as savings, taxes, and imports, which decrease aggregate demand. A decrease in leakages will lead to an increase in aggregate demand, leading to an increase in output and employment. Therefore, if flow 6 decreases, the unemployment rate will go down.

Refer to the Following Diagram