Which of the following is an example of a leakage from the circular flow of income and expenditure?
A)Investment
B)Imports
C)Government purchases
D)Exports
E)Transfer payments

Question

Quizplus · Accepted Answer

Imports represent a leakage from the circular flow of income and expenditure because they represent spending on goods and services that did not originate from within the domestic economy, leading to a portion of the total spending leaking out of the domestic economy.

Which of the Following Is an Example of a Leakage