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
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:

• 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.

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Definitions:

Environment

The surrounding conditions, influences, or forces that affect the operation of a business or the well-being of individuals.

Moral Idealism

A philosophical belief that places importance on certain ethical principles as absolutes, irrespective of the outcomes.

Accumulated

Refers to an amount or quantity of something that has been gathered or collected over a period of time.

Human Tissue

Biological material from the human body, such as organs and cells, used in medical or scientific research.