Which is true of leakages and injections in the circular flow?
A)Leakages minus injections equal GDP.
B)Injections minus leakages equal GDP.
C)Leakages minus injections equal zero in equilibrium.
D)Domestic leakages must equal domestic injections.
E)Leakages must be greater than injections for the economy to be growing.

Question

Quizplus · Accepted Answer

In equilibrium, leakages (savings, taxes, imports) equal injections (investment, government spending, exports), so leakages minus injections equal zero.

Which Is True of Leakages and Injections in the Circular