Answer to Question #105783 in Macroeconomics for Portia

Question

Which of the following statements are correct?
1 If spending equals to production and income, there is no tendency for production and income to change.
2 If spending is greater than production and income, the level of production and income will decrease.
3 If spending is greater than production and income, the level of production and income will increase
4 If spending less than production and income, the level of production and income will decrease
Spending may be equal to income but smaller than production.

Answer 1

1, 2, 5