1. Why is saving called a leakage ? Why is planned investment
called an injection ? Why must saving equal planned investment
at equilibrium GDP in the private closed economy?
Are unplanned changes in inventories rising, falling, or constant
at equilibrium GDP? Explain.
2. What effect will each of the changes listed in Study Question
3 of Chapter 8 have on the equilibrium level of GDP in
the private closed economy? Explain your answers.
3. By how much will GDP change if firms increase their investment
by $8 billion and the MPC is .80? If the MPC is .67?