Which of the following is an example of a leakage from the circular flow of income and expenditure?

Question

Quizplus · Accepted Answer

Taxes are considered a leakage because they are taken out of the economy and do not immediately go back into the circular flow. They are collected by the government and used for various expenditures, but they do not directly contribute to the production of goods and services or the generation of income.

Which of the Following Is an Example of a Leakage