In the Circular Flow Model, Savings Is Considered a Leakage

question 46

Multiple Choice

In the circular flow model, savings is considered a leakage because

• A)it does not get counted toward an individual's accumulated wealth.
• B)it becomes an input toward venture capital
• C)it contributes to the budget surplus.
• D)it is the amount that consumers do not spend of their disposable income.

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Definitions:

Symmetrical

A characteristic of a shape or distribution where one half is a mirror image of the other half, usually about a central point or axis.

Unimodal Distribution

A type of distribution that has a single peak or mode, showing one predominant frequency of data points.

Negatively Skewed Distribution

A distribution shape where the tail is on the left side, indicating that the bulk of values are concentrated on the right.

Mode

The number that occurs the greatest number of times in a series of data.