Imports are a leakage in the sense that
A)the international financial system is unstable.
B)consumers buy foreign output of goods and services.
C)foreigners earn less than U.S.workers.
D)a trade deficit increases aggregate demand.

Question

Quizplus · Accepted Answer

Imports refer to goods and services that are produced in foreign countries and purchased by consumers in the domestic economy. This means that money is flowing out of the domestic economy to other countries, which is often referred to as a leakage. Therefore, choice B is the correct answer as it accurately describes the leakage created by imports. The other answer options (A, C, and D) are not correct as they do not accurately describe the impact of imports on the domestic economy.

Imports Are a Leakage in the Sense That