Leakages from the circular flow are _________ and __________?
Correct answer: B. savings, taxes net of subsidies imports
- A. investment, savings, government expenditure
- B. savings, taxes net of subsidies imports
- C. consumption investment government expenditure
- D. consumption taxes imports
Explanation
Leakages remove spending from the circular flow: saving, taxes net of subsidies, and imports. Investment, government spending and exports are injections, so option a mixes the two categories.
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