Which of the following is a leakage from the circular flow?
A)government purchases of goods and services
B)taxes
C)investment
D)exports
E)consumption expenditures

Question

Quizplus · Accepted Answer

Taxes are a leakage from the circular flow because they represent money that is taken out of the economy and not spent by consumers or businesses. The other choices listed are either injections into the economy (government purchases, investment, and exports) or consumption expenditures which represents spending within the circular flow.

Which of the Following Is a Leakage from the Circular