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Suppose That the Economy Is in Equilibrium, with the Government

Question 36

Multiple Choice

Suppose that the economy is in equilibrium, with the government budget in deficit and with exports greater than imports.According to the circular-flow model, how does saving relate to investment?  


A)  Saving must exceed investment. 
B)  Saving must equal investment. 
C)  Saving must be less than investment. 
D)  Saving could be equal to or less than investment.

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