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Basic Concepts & the Circular Flow · Question 70 of 72

Question 70

HardOriginal question

In a three-sector economy (households, firms and government), which pair is an injection and a leakage, in that order?

Options for question 70

Show the answer and explanation
CorrectNot quiteAnswer A

Correct answer: A

Explanation

  1. Government spending adds demand for firms' output: an injection.

  2. Taxes take income away from spending: a leakage.

Concept
The government in the circular flow
Typical time
100 s
Your time
—
The rule this testsThe circular flow of income
Practise this chapter →

Ten questions from Basic Concepts & the Circular Flow, at your own pace.

Practise this chapter →

Ten questions from Basic Concepts & the Circular Flow, at your own pace.