Question:
Which of the following is NOT an example of leakage from the circular flow of income?
Which of the following is NOT an example of leakage from the circular flow of income?
Updated On: Nov 4, 2024
- Savings
- Taxes
- Imports
- Government spending
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The Correct Option is D
Solution and Explanation
Leakages in the circular flow of income refer to withdrawals of money from the economy, such as savings, taxes, and imports. These reduce the overall economic activity. Government spending, on the other hand, is an injection, meaning it adds money into the economy, stimulating demand.
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