Which of the Following Is an Example of a Leakage

question 89

Multiple Choice

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

• A) savings
• B) exports
• C) government expenditure on goods
• D) transfer payments
• E) investment by firms

---

Definitions:

Stockholders' Equity

The portion of a company's capital that comes from the investment of its shareholders, represented by the shares issued to them.

Profitability

The degree to which a company or business activity makes a profit, typically measured over a specific period of time.

Leverage

The use of borrowed funds to increase the potential return of an investment.

Solvency

A measure of a company's ability to meet its long-term financial obligations, reflecting its financial stability and health.