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

question 94

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 In Figure 10.3, which of the following represents the paradox of thrift? A) A shift of the saving curve from S<sub>2</sub> to S<sub>1</sub>. B) A shift of the saving curve from S<sub>1</sub> to S<sub>2</sub>. C) A change in equilibrium from e<sub>2</sub> to e<sub>1</sub>. D) A change in equilibrium real GDP from $300 to $400. E) A change in equilibrium real GDP from $100 to $400. In the figure:
S1 and S2: Saving functions
I: Investment
G: Government spending
EX: Net exports
In Figure 10.3, which of the following represents the paradox of thrift?

Definitions:

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