Ceteris paribus,based on the circular flow model,a spending injection results in:
A) A decrease in total income for consumers.
B) An increase in total income for consumers.
C) An increase in the MPS.
D) A decrease in the MPS.

Question

Quizplus · Accepted Answer

According to the circular flow model, a spending injection results in an increase in total income for consumers since it leads to an increase in demand for goods and services, leading to increased production and employment, and hence increased income for consumers. Therefore, the correct answer is B.

Ceteris Paribus,based on the Circular Flow Model,a Spending Injection Results