Question:
When an individual buys foreign goods, this spending is known as ........
When an individual buys foreign goods, this spending is known as ........
Show Hint
Imports are leakages; exports are injections in the circular flow of income.
Updated On: Sep 9, 2025
- Injection in the economy
- Exchange rate market
- Leakages from economy
- Direct investment
Hide Solution
Verified By Collegedunia
The Correct Option is C
Solution and Explanation
Step 1: Recall concept of circular flow of income.
- Injections: Additions to the economy (investment, exports, government spending).
- Leakages: Withdrawals from the economy (savings, taxes, imports).
Step 2: Apply to imports.
When an individual buys foreign goods, money flows out of the domestic economy into another country. This reduces domestic demand and is treated as a leakage.
Step 3: Eliminate wrong options.
- (A) Injection → opposite of leakage.
- (B) Exchange rate market → refers to forex trading.
- (D) Direct investment → cross-border asset acquisition, not imports.
Final Answer: \[ \boxed{\text{Leakages from economy}} \]
- Injections: Additions to the economy (investment, exports, government spending).
- Leakages: Withdrawals from the economy (savings, taxes, imports).
Step 2: Apply to imports.
When an individual buys foreign goods, money flows out of the domestic economy into another country. This reduces domestic demand and is treated as a leakage.
Step 3: Eliminate wrong options.
- (A) Injection → opposite of leakage.
- (B) Exchange rate market → refers to forex trading.
- (D) Direct investment → cross-border asset acquisition, not imports.
Final Answer: \[ \boxed{\text{Leakages from economy}} \]
Was this answer helpful?
0
0
Top Questions on Economics
- Match List-I with List-II: \[ \begin{array}{|c|l|c|l|} \hline \textbf{List-I} & & \textbf{List-II} & \\ \hline (A) & \text{Analysis assumes that level of utility can be expressed in numbers.} & (I) & \text{Cardinal Utility} \\ \hline (B) & \text{Change in total utility due to consumption of one additional unit of a commodity.} & (II) & \text{Law of Diminishing Marginal Utility} \\ \hline (C) & \text{Marginal utility from consuming each additional unit of a commodity declines as its consumption increases.} & (III) & \text{Marginal Utility} \\ \hline (D) & \text{The amount of mangoes that the consumer has to forego in order to get an additional banana, her total utility level being the same.} & (IV) & \text{Marginal Rate of Substitution} \\ \hline \end{array} \]
- The difference between the value of exports and the value of imports of goods of a country in a given period of time is known as by what name?
- Suppose an Indian manufacturer of steel acquires a steel manufacturing unit in Europe. This type of transactions are recorded in which of the following?
- In deficit condition of Balance of Payment if the central bank sells foreign exchange then this particular transaction is known as ........
- Ex-post is depicted by which of the following ........
View More Questions
Questions Asked in CUET exam
'इदम्' शब्दस्य स्त्रीलिङ्गे तृतीया-विभक्तौ बहुवचने कि रूपं भवति ?
- CUET (UG) - 2025
- Pronouns (सर्वनाम)
'कर्तृ' शब्दस्य एकवचनस्य रूपाणि इमानि विभक्त्यनुसारं क्रमेण व्यवस्थापयत ।
(A) कर्त्रा
(B) कर्त्रे
(C) कर्तुः
(D) कर्तारम्
(E) कर्ता
अधोलिखितेषु विकल्पेषु उचिततमम् उत्तरं चिनुत-- CUET (UG) - 2025
- Noun Declension (शब्द रूप)
प्रथमां सूचीं द्वितीयया सूच्या सह मेलयत ।
सूची-I सूची-II (A) षडाननः (I) यण्-सन्धिः (B) यद्यत्र (II) व्यञ्जन-सन्धिः (C) साधुस्तरति (III) विसर्ग-सन्धिः (D) महौषधम् (IV) वृद्धि-सन्धिः
अधोलिखितेषु विकल्पेषु उचिततमम् उत्तरं चिनुत -'उत्+देशः' इत्यत्र सन्धिं कुरुत ।
'दुष्कृतम्' इत्यस्य सन्धि-विच्छेदं कुरुत ।
View More Questions