Which of the following is an injection into the spending stream, or into the circular flow model?
A) Business taxes.
B) Household saving.
C) Expenditures on imports.
D) Household expenditures from transfer payments.

Question

Quizplus · Accepted Answer

Household expenditures from transfer payments are considered an injection into the spending stream or circular flow model because they represent additional funds that households can spend in the economy, thus increasing overall demand. Transfer payments include social security, unemployment benefits, and other government payments that do not directly correspond to a current production of goods or services but enable households to increase their spending.

Which of the Following Is an Injection into the Spending