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

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Definitions:

Bulk Transfer

The transfer of a substantial part of the materials, inventory, or supplies of a business outside the ordinary course of business.

Ordinary Course of Business

The regular, usual, and customary activities and operations that a company engages in to conduct its business.

Consignment

The process of handing over goods to another party to sell on behalf of the owner, yet ownership remains with the original party until the goods are sold.

Personal Property

Movable items owned by an individual or corporation, as opposed to real property like land or buildings.