Leakages are earned income that is:
A) spent, which leads to a decrease in output, employment, and income.
B) spent, which leads to an increase in output, employment, and income.
C) not spent, which leads to a decrease in output, employment, and income.
D) not spent, which leads to an increase in output, employment, and income.

Question

Quizplus · Accepted Answer

Leakages refer to the portion of income that is not spent on the consumption of goods and services within the economy. This includes savings, taxes, and imports. When income is not spent, it leads to a decrease in demand, which can result in lower output, employment, and income levels.

Leakages Are Earned Income That Is