Which of the Following Is an Example of a Leakage

question 80

Multiple Choice

Which of the following is an example of a leakage from the circular flow of income and expenditure?

• A)Government purchases of goods and services
• B)Taxes
• C)Investment
• D)Exports
• E)Consumption expenditures

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Definitions:

Cost Method

An accounting method in which investments are recorded at their original purchase cost, without recognizing changes in market value.

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a certificate or instrument.

Par Value

The nominal or face value of a bond, stock, or coupon as stated by the issuer, which is typically not indicative of its market value.

Stated Value

A nominal value assigned by a company to its issued shares, which may be above or below the market value.