An Addition of Spending to the Circular Flow of Income

question 24

Multiple Choice

An addition of spending to the circular flow of income is

• A)An injection.
• B)A leakage.
• C)A surplus.
• D)Household taxes.

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Definitions:

Trade Deficit

The circumstance where a country's imports outpace its exports, causing a negative trade balance.

Trade Surpluses

Trade surpluses occur when a country's exports exceed its imports over a given period, indicating a net inflow of domestic currency from foreign markets.

Savings Rate

The proportion of income that is saved rather than spent on goods and services.

Trade Deficit

Occurs when a country's imports exceed its exports during a given time period, leading to an outflow of domestic currency to foreign markets.