Which of the following statements is true regarding equilibrium in an economy?

Equilibrium in an economy refers to a state where total spending (aggregate demand) equals total output (aggregate supply). When injections—such as investments, government spending, and exports—are balanced with leakages, which include savings, taxes, and imports, the economy is in a stable state. This balance is essential for maintaining overall economic stability, preventing significant fluctuations in GDP levels.

Other statements do not accurately describe equilibrium. One cannot say that equilibrium leads to rapid economic growth; rather, it reflects a state of balance. Equilibrium does not typically indicate higher unemployment rates, as it is often associated with a normal functioning economy where resources, including labor, are efficiently utilized. Lastly, fluctuating GDP levels would indicate instability, which is the opposite of what equilibrium represents. Thus, the understanding that equilibrium is characterized by the balance of injections and leakages is essential for grasping fundamental economic concepts.