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Income Determination & the Multiplier · Question 13 of 58

The graph shows the saving and investment lines.

Question 13

MediumOriginal question

The graph shows the saving and investment lines. At an income of ₹300 crore, planned saving is ₹35 crore. What happens?

A saving line S starting at −₹40 crore and rising, and a horizontal investment line I at ₹60 crore. They meet at E, where income is ₹400 crore and saving equals investment at ₹60 crore. The saving line crosses the income axis at ₹160 crore.
Options for question 13

Show the answer and explanation
CorrectNot quiteAnswer C

Correct answer: C

Explanation

  1. I = 60 at every income; S = 35 at Y = 300.

  2. I > S by 25: injections exceed leakages, so income rises towards ₹400 crore.

Concept
Below equilibrium with S and I
Typical time
70 s
Your time
—
The rule this testsEquilibrium: saving equals investment
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Ten questions from Income Determination & the Multiplier, at your own pace.

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Ten questions from Income Determination & the Multiplier, at your own pace.

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