Which Two Important Leakages Helped Reduce the Real Life Spending

question 189

Multiple Choice

Which two important leakages helped reduce the real life spending multiplier during the stimulus that was implemented during 2009?

• A) exports and saving
• B) imports and saving
• C) exports and taxes
• D) imports and taxes

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Definitions:

Market Equilibrium

The condition in which market supply equals market demand, such that prices become stable.

Increased Demand

Describes a situation where a larger number of consumers are willing and able to purchase a good or service at a given price, often leading to higher prices or a market shortage if supply does not increase correspondingly.

Price Ceiling

A legally established maximum price that can be charged for a good or service, preventing prices from reaching equilibrium levels.

Surplus

A situation where the quantity of a product supplied exceeds the quantity demanded, often resulting in a decrease in prices.