In the circular ﬂow of income, the purchase of a hospital by the government represents _____.
A) a payment made to a factor of production
B) an injection into the circular ﬂow
C) an investment by a ﬁrm
D) a leakage from the circular ﬂow

Question

Quizplus · Accepted Answer

The purchase of a hospital by the government is considered an injection into the circular flow because it represents government spending, which adds to the overall economic activity by providing funds to the economy that can be used for various purposes, including paying wages, buying supplies, and improving infrastructure.

In the Circular ﬂOw of Income, the Purchase of a Hospital