PRC-3 · Chapter 13 · Question 30 of 50
According to macroeconomic equilibrium conditions, an economy is strictly in equilibrium when total injections (I + G + X) are perfectly equal to:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Total leakages (Savings + Taxes + Imports)
Explanation
Equilibrium in the circular flow occurs when the money injected into the economy perfectly balances the money withdrawn or leaked out (S + T + M).
More National Income and Its Determination MCQs
- Q32In the standard circular flow of income model, which of the following is definitively NOT classified as a 'leakage' or 'withdrawal'?
- Q33Which of the following macroeconomic events is most likely to cause a severe decrease (leftward shift) in a country's short-run Aggregate…
- Q34Assume a prolonged, massive strike by coal miners drastically reduces the supply of coal and spikes its price. Because coal is a core…
- Q35If the sale value of final goods by firms is Rs. 45 billion, and they purchased Rs. 10 billion worth of intermediate materials from…
- Q36Why do national statisticians strictly exclude 'unemployment benefits' and 'state pensions' when calculating the Gross Domestic Product?