When saving leaks out of the circular flow of income and spending,
A. total income necessarily falls.
B. it leaks out of the financial system.
C. it flows to borrowers.
D. it increases the size of the spending flow.
Answer: C
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Government stabilization policy
A. cannot influence investment spending. B. can stimulate aggregate demand and thereby induce businesses to invest, but the amount is not totally predictable. C. can stimulate aggregate demand, but investment spending will not be affected. D. can stimulate aggregate demand, but only in the long run.
Refer to Figure 6.1. At point A, the marginal product of labor is
A) rising. B) at its minimum. C) at its maximum. D) diminishing.
If the money multiplier is approximated to be 2, then the reserve ratio must be:
A. 5 percent. B. 50 percent. C. 2 percent. D. 20 percent.
Explain the reasons for a decrease in the rate of illegal immigration in the United States in recent years
What will be an ideal response?