Which of the Following Is an Injection into the Circular

question 128

Multiple Choice

Which of the following is an injection into the circular flow?

• A) household saving and government spending
• B) business investment and household saving
• C) net taxes and household saving
• D) government spending and business investment
• E) net taxes and government spending

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Definitions:

Wage Rate

The standard amount of compensation individuals receive in exchange for performing a certain task or job per unit of time.

Monetary Policy

The process by which a central bank, currency board, or equivalent regulatory committee manages the supply of money and interest rates to achieve macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity.

Rational Expectations

Rational expectations is an economic theory that assumes individuals form forecasts about the future based on all available information, thereby influencing economic outcomes.

Active Policy

Economic strategies and measures actively implemented by governments to influence the economy, such as fiscal and monetary policies.