Why do prices rise when incomes rise, if the income is spent?
The Status Quo diagram shows customers buying consistently from a business which distributes pay to the employees who use it to buy housing and groceries. The price of housing and groceries have stabilized around certain values.
The Prices Rise diagram shows a double in customer funds, which are distributed to employees with nonlinear income who use it to improve their housing. They also change their grocery spending. Since everyone shares grocery stores, the prices for groceries rise even for the people with no increase in income.
The Saved Money diagram shows a double in customer funds, which are distributed to employees with nonlinear income who save their extra money. Since there is no increase in spending, there is no increase in the price of housing or groceries.