Consider the circular flow of expenditure and income in the Canadian economy. Which of the following is an
Injection into the circular flow?

Question

Quizplus · Accepted Answer

A government purchase of new Coast Guard ships is an injection into the circular flow because it adds to the total expenditure in the economy. It increases the flow of money and helps to stimulate economic activity. The other options listed are not injections into the circular flow. Loblaws importing cheese from Switzerland, for example, is a leakage as money is leaving the Canadian economy, and the same goes for the car parts imported by Toyota. Paying GST and contributing to a pension plan do not increase the total expenditure in the economy.

Consider the Circular Flow of Expenditure and Income in the Canadian