When withdrawals equal injections, the economy
A) is losing money.
B) still has to adjust to bring both down to zero.
C) is in a recession.
D) is in equilibrium.

Question

Quizplus · Accepted Answer

When withdrawals (savings, taxes, and imports) equal injections (investment, government spending, and exports), the economy is said to be in equilibrium. This means that there is no net change in the level of economic activity, and the economy is stable.

When Withdrawals Equal Injections, the Economy