Which of the following correctly illustrates the leakages-injections approach to GDP?
A)DI + (NT)= C + I + G + (X ‒ M)
B)S + C + NT = DI
C)S + C + (NT)= I + G + (X ‒ M)
D)S + (NT)+ M = I + G + X
E)S + (NT)= I + G + (X ‒ M)

Question

Quizplus · Accepted Answer

The leakages-injections approach to GDP considers leakages (savings, taxes, and imports) and injections (investment, government spending, and exports) into the economy. Option D correctly matches leakages (S + NT + M) with injections (I + G + X), illustrating the balance between the two for an economy to be in equilibrium.

Which of the Following Correctly Illustrates the Leakages-Injections Approach to GDP