Total withdrawals from the circular flow of income include ?
Correct answer: D. savings taxes and imports
- A. consumption savings and taxes
- B. savings government expenditure and imports
- C. savings taxes and exports
- D. savings taxes and imports
Explanation
Withdrawals, or leakages, from the circular flow are savings, taxes, and imports. Consumption and exports are injections or spending components, so they do not belong in this list.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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