In the circular flow model, which of the following is considered a leakage?
A)investment spending
B)business spending
C)household saving
D)total exports

Question

In the circular flow model, which of the following is considered a leakage?
A)investment spending 
B)business spending 
C)household saving 
D)total exports

Quizplus · Accepted Answer

Household saving is considered a leakage in the circular flow model because it represents a portion of income that is not immediately spent on goods and services. This means that it is not flowing back into the economy, causing a reduction in the amount of money available for spending and investment.

In the Circular Flow Model, Which of the Following Is