Using the Keynesian approach, an economy with $7.5 trillion in total spending and $8.0 trillion in total output is operating where:
A) injections exceed leakages by $500 billion.
B) leakages exceed injections by $500 billion.
C) injections plus leakages add up to $500 billion.
D) injections plus leakages add up to $15.5 trillion.

Question

Quizplus · Accepted Answer

In the Keynesian framework, total spending represents injections into the economy, while total output represents the sum of injections and leakages. If total spending is $7.5 trillion and total output is $8.0 trillion, it means that leakages (savings, taxes, and imports) exceed injections (investment, government spending, and exports) by the difference between total output and total spending, which is $500 billion.

Using the Keynesian Approach, an Economy with $7