Question

Total spending will equal total output A. after inventory adjustments B. only when total leakages are equal to total injections C. by the end of every year D. only when the sum of saving and investment equals the sum of net taxes and government expenditures E. saving is equal to net taxes

Answer 1

Answer:

Option D is correct one.

Saving plus net taxes equals planned investment plus government purchases.

Explanation:

Total spending equals total output if and only if leakages are equal to injections—that is, only if the sum of saving and net taxes  is equal to the sum of planned investment spending and government purchases.

Answer 2

Answer:

D. only when the sum of saving and investment equals the sum of net taxes and government expenditures

Explanation:

Based on the scenario being said in the question where it is asked that which total spending will equal total, that will happen only when the sum of the savings and investment.

Total spending can only equals total output if and only if leakages will be equal to injections, in other words, only if the sum of saving and net taxes (addition of Saving and Nets) is equal to the sum of planned investment spending and government purchases (addition of planned investment and government purchases.)