In the circular flow model, which of the following is an injection?
A)investment spending
B)government taxes
C)total exports
D)imports

Question

In the circular flow model, which of the following is an injection?
A)investment spending 
B)government taxes 
C)total exports 
D)imports

Quizplus · Accepted Answer

In the circular flow model, an injection refers to any expenditure or income that increases the income flow in the economy. Investment spending is an injection because it is spending by firms on capital goods, such as factories and equipment, that increases the production capacity of the economy and creates jobs. Government taxes, total exports, and imports are not injections but are instead leakages from the economy that decrease the income flow.

In the Circular Flow Model, Which of the Following Is