The Figure Given Below Represents the Leakages and Injections in an Economy

question 83

Multiple Choice

The figure given below represents the leakages and injections in an economy.
Figure 10.3
In the figure:
S₁ and S₂: Saving functions
I: Investment
G: Government spending
EX: Net exports
-Refer to Figure 10.3. If saving is represented by S₁, at a real GDP level of $500:

• A) leakages are greater than injections which will cause income to increase.
• B) leakages are greater than injections which will cause income to decrease.
• C) leakages are less than injections which will cause income to increase.
• D) leakages are less than injections which will cause income to decrease.
• E) leakages are equal to injections which will cause no change in income.

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Definitions:

Operation Of Law

Changes in rights or obligations that occur automatically due to established legal rules, without the need for action by the parties involved.

Bankruptcy

A legal process through which individuals or businesses unable to meet their financial obligations can seek relief from some or all of their debts.

Partnership By Estoppel

A legal doctrine that treats a non-partnership as if it were an actual partnership because third parties were misled to believe a partnership existed.

Delectus Personae

A legal principle emphasizing the importance of personal choice and trust in the selection of individuals to fulfill certain roles, especially in partnerships.