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

question 31

Multiple Choice

The figure given below represents the leakages and injections in an economy.
Figure 10.3
The figure given below represents the leakages and injections in an economy. Figure 10.3    In the figure: S<sub>1</sub> and S<sub>2</sub>: Saving functions I: Investment G: Government spending EX: Net exports -Refer to Figure 10.3. The paradox of thrift might not be a problem if: A)  the average price level does not change in the short run. B)  the I + G + EX line were downward-sloping. C)  the I + G + EX line were constant at an intercept of $30. D)  the increase in saving was used to fund investment expenditures. E)  the I + G + EX line were constant at an intercept of $50. In the figure:
S1 and S2: Saving functions
I: Investment
G: Government spending
EX: Net exports
-Refer to Figure 10.3. The paradox of thrift might not be a problem if:


Definitions:

Compensation

The total amount of the monetary and non-monetary pay provided to an employee in return for work performed as required.

Two-Tier Wage System

An employment system where new employees are paid less than existing employees for doing the same job, often used to reduce costs.

Product Market

The marketplace where final goods or services are traded between sellers and buyers, focusing on competition, supply, and demand dynamics.

Customer Bases

The group of customers who repeatedly purchase the goods or services of a business.

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