Part B: Review at the Circular Flow Diagram- Exhibit 3 in Chapter 6 (page 101in 5th edition), It provides an illustration of one of the important macroeconomic models. Basic purpose of an economic model is to explair and predict events. What will be the effect to the economy if value of Leakages is greater than value of Injections due to some events in the economy. Complete the answer by discussing how possible changes in Leakages and/or Injections will affect the economy. Start by mentioning all the Leakages and Injections that are found in the Circular Flow Model.

Part B: Review at the Circular Flow Diagram- Exhibit 3 in Chapter 6 (page 101in 5th edition), It provides an illustration of one of the important macroeconomic models. Basic purpose of an economic model is to explair and predict events. What will be the effect to the economy if value of Leakages is greater than value of Injections due to some events in the economy. Complete the answer by discussing how possible changes in Leakages and/or Injections will affect the economy. Start by mentioning all the Leakages and Injections that are found in the Circular Flow Model.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Savings,investment And The Financial System

Section: Chapter Questions

Problem 4PA

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