PRC-3 · Chapter 9 · Question 27 of 45
According to the circular flow model, when total leakages (S + T + M) perfectly equal total injections (I + G + X), the economy is in a state of:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Macroeconomic equilibrium
Explanation
An economy reaches macroeconomic equilibrium when the money leaving the circular flow (leakages) perfectly matches the money entering it (injections).
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