Equilibrium in the circular flow of income occurs when ?
Correct answer: A. Injections = withdrawals
- A. Injections = withdrawals
- B. There is a Bank Holiday
- C. Injections withdrawals
- D. None of these
Explanation
Circular-flow equilibrium requires total injections, including investment and government spending, to equal total withdrawals, including saving and taxes. If they differ, national income changes until equilibrium is restored.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
Practise Macroeconomics
1,499 free Macroeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Macroeconomics questions
The underground economy consists of ?
Two of the major factors contributing to growth are ?
In an economy measuring (1) total value added (2)total spending on final goods and (3)total factor earning gives the result that ?
Total withdrawals from the circular flow of income include ?
According to the classical economists, the only gainers from growth would be ?
It has become conventional classify a recession as a period where national output falls for _________ or more?