According to the Keynesian approach, injections minus leakages equal:
A) total spending.
B) zero when the economy is in equilibrium.
C) income-determined spending minus nonincome-determined spending.
D) none of the above.

Question

Quizplus · Accepted Answer

In the Keynesian framework, when injections (such as investments, government spending, and exports) minus leakages (such as savings, taxes, and imports) equal zero, the economy is considered to be in equilibrium. This means that all spending is matched by income, leading to no unintended accumulation or depletion of inventories, and thus, the economy does not tend to expand or contract.

According to the Keynesian Approach, Injections Minus Leakages Equal