In the circular flow we would expect leakages to ___________ injections?
Correct answer: A. equal
- A. equal
- B. be less than
- C. be greater than
- D. be less or greater than
Explanation
In a circular-flow equilibrium, leakages such as saving, taxation and imports are exactly offset by injections such as investment, government spending and exports. Therefore, leakages equal injections.
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