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Economics (AS & A Level) · Oct / Nov 2023 · Paper 11 · Question 24

9708Introduction to the circular flow of income

General equilibrium in the macroeconomy is achieved when total injections are equal to total leakages. What is most likely to cause disequilibrium in the macroeconomy in the short run?

  1. Aan increase in government spending of $10bn and a decrease in exports of $10bn
  2. Ban increase in investment of $30bn and a decrease in household savings of $30bn
  3. Can increase in spending on imports of $40bn and an increase in government spending of $40bn
  4. Dan increase in taxation of $40bn and a decrease in spending on imports of $40bn

As printed in the paper

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Correct answer: B. an increase in investment of $30bn and a decrease in household savings of $30bn

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