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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