Which of the following is an injection into the circular flow?
A)government spending
B)imports
C)disposable income
D)taxes
E)saving

Question

Quizplus · Accepted Answer

An injection into the circular flow refers to any addition to the flow of income that does not originate within the system itself. Government spending is an injection because it represents additional spending on goods and services that is financed by tax revenues or borrowing from outside the circular flow. The other options are all withdrawals from the circular flow: imports represent spending on foreign-produced goods and services, disposable income represents the portion of income that is not spent on goods and services (i.e. saved), taxes represent revenue that is taken out of the system by the government, and saving represents income that is not spent on current consumption.

Which of the Following Is an Injection into the Circular