Which of the Following Statements Is True Regarding Leakages and Injections

question 168

Multiple Choice

Which of the following statements is true regarding leakages and injections?

• A) Government transfer payments must equal exports because one is a leakage and the other is an injection.
• B) Imports must equal exports since both are leakages.
• C) Government purchases, investment, and exports are leakages from the circular flow of income and expenditure.
• D) Savings and net taxes are leakages from the circular flow of income and expenditure.
• E) Net taxes are an injection into the circular flow, while exports are a leakage.

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Definitions:

Universal Life Insurance

A flexible type of permanent life insurance offering the low-cost protection of term life insurance as well as a savings element (like whole life insurance), which is invested to provide a cash value buildup.

Term Life Insurance

An insurance policy that provides coverage at a fixed rate of payments for a limited period of time, after which coverage expires without accumulating cash value.

Whole Life Insurance

A type of permanent life insurance policy that provides coverage for the insured's entire life, typically including a savings component.

Premiums

Payments made for insurance coverage, representing the cost of the insurance policy to the holder, typically made on a regular basis.