All other things equal, if business saving is greater than investment spending, then injections into the spending stream are:
A) less than leakages, and the economy will expand.
B) less than leakages, and the economy will contract.
C) greater than leakages, and the economy will expand.
D) greater than leakages, and the economy will contract.

Question

Quizplus · Accepted Answer

When business saving is greater than investment spending, it means that there is more money being saved than is being invested back into the economy. This scenario leads to a situation where leakages (savings) exceed injections (investments), which typically results in a contraction of economic activity because less money is circulating within the economy to stimulate growth.

All Other Things Equal, If Business Saving Is Greater Than