Which of the following is a leakage in an open economy?
A) Planned investment
B) Imports
C) Exports
D) Government purchases
E) Money

Question

Quizplus · Accepted Answer

Imports represent a leakage in an open economy because they are a flow of money leaving the economy to pay for goods and services produced in other countries. This money is not being spent domestically and therefore represents a leakage from the circular flow of income.

Which of the Following Is a Leakage in an Open