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
In Figure 10.3, which of the following represents the paradox of thrift?

A) A shift of the saving curve from S₂ to S₁.
B) A shift of the saving curve from S₁ to S₂.
C) A change in equilibrium from e₂ to e₁.
D) A change in equilibrium real GDP from $300 to $400.
E) A change in equilibrium real GDP from $100 to $400.

Correct Answer:

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