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.If saving is represented by S₁, at a real GDP level of $500:

A) leakages are greater than injections which will cause income to increase.
B) leakages are greater than injections which will cause income to decrease.
C) leakages are less than injections which will cause income to increase.
D) leakages are less than injections which will cause income to decrease.
E) leakages are equal to injections which will cause no change in income.

Correct Answer:

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