Answer Happy

Suppose exports fall and savings rise. Which of the following would best describe the changes according to the Keynesian model of using income and expenditure in determining the equilibrium national output? (3 marks) (a) Injections function shifts up, withdrawals function shifts to the right, and the new equilibrium output is higher. (b) Injections function shifts down, withdrawals function shifts to the right, and the new equilibrium output is higher. (c) Injections function shifts up, withdrawals function shifts to the left, and the new equilibrium output is lower. (d) Injections function shifts down, withdrawals function shifts to the left, and the new equilibrium output is lower.