Which of the Following Statements Is True Regarding Leakages and Injections

question 160

Multiple Choice

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

• A)Government transfer payments must equal taxes because one is a leakage and one is an injection.
• B)Imports must equal exports since both are leakages.
• C)Saving must equal investment for the economy to be in equilibrium.
• D)Since leakages equal injections,aggregate income equals aggregate expenditure.
• E)Net taxes are an injection into the circular flow; net exports are a leakage.

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Definitions:

Total Assets

The sum of all resources owned by a company as reflected on the balance sheet, including both current and non-current assets.

Accumulated Depreciation

Accumulated depreciation represents the total depreciation expense assigned to a fixed asset over its useful life, reducing its book value.

Investments

Assets purchased with the expectation that they will generate income or appreciate in the future.

Owner's Equity

Refers to the residual interest in the assets of a company after deducting liabilities, representing the ownership interest.