Which Is True of Leakages and Injections in the Circular

question 145

Multiple Choice

Which is true of leakages and injections in the circular flow?

• A)Leakages minus injections equal GDP.
• B)Injections minus leakages equal GDP.
• C)Leakages minus injections equal zero in equilibrium.
• D)Domestic leakages must equal domestic injections.
• E)Leakages must be greater than injections for the economy to be growing.

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Definitions:

Import Demand

The quantity of goods or services that domestic consumers or firms are willing to purchase from abroad at various prices.

Export Supply

The quantity of goods or services available from a country for sale to other countries, directly related to national production capacities and international demand.

Protective Tariff

A tax imposed on imported goods to protect domestic industries from foreign competition by making the imported goods more expensive.

Tariff

A tax imposed by a government on goods and services imported from other countries.