When Saving Leaks Out of the Circular Flow of Income

question 129

Multiple Choice

When saving leaks out of the circular flow of income and spending,

• A)total income necessarily falls.
• B)it leaks out of the financial system.
• C)it flows to borrowers.
• D)it increases the size of the spending flow.

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Definitions:

Working Papers

Working Papers refer to documents, notes, and other materials created or used by auditors, accountants, or lawyers during the course of their professional activities.

Performing an Audit

The process of examining an organization's financial records to ensure accuracy and compliance with accounting standards and regulations.

Public Company Accounting Oversight Board

A nonprofit corporation established by Congress to oversee the audits of public companies to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports.

SEC

The U.S. Securities and Exchange Commission, a federal agency responsible for enforcing federal securities laws and regulating the nation's securities industry.