The Figure Given Below Represents the Leakages and Injections in an Economy

The figure given below represents the leakages and injections in an economy.
Figure 10.3
In the figure:
S₁ and S₂: Saving functions
I: Investment
G: Government spending
EX: Net exports
-Refer to Figure 10.3. The paradox of thrift might not be a problem if:

A) the average price level does not change in the short run.
B) the I + G + EX line were downward-sloping.
C) the I + G + EX line were constant at an intercept of $30.
D) the increase in saving was used to fund investment expenditures.
E) the I + G + EX line were constant at an intercept of $50.

Correct Answer:

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