Which of the Following Is True of Leakages and Injections

question 14

Multiple Choice

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

• A)Leakages minus injections equal gross domestic product (GDP).
• B)Injections minus leakages equal gross domestic product (GDP).
• C)Leakages minus injections equal zero in equilibrium.
• D)Leakages must be less than injections for an economy to be in equilibrium.
• E)Leakages must be greater than injections for an economy to be growing.

Assess the relationship between health care spending and GDP.

Evaluate work hours in relation to productivity and international comparisons.

Understand the basic concepts of GDP per capita and its significance in comparing economic health.

Understand the basic principles of Malthusian theory regarding population growth and its checks.

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Definitions:

Market System

A financial structure in which the choices about investment, production, and allocation are directed by the pricing cues generated by supply and demand dynamics.

Entrepreneurs

Individuals who innovate, create, and manage new businesses, taking on financial risks in the hope of profit.

Prudent Risk Management

The process of identifying, assessing, and prioritizing risks followed by coordinated application of resources to minimize, monitor, and control the probability or impact of unforeseen events.

Wage, Rent

Wage refers to the payment to labor for its contribution to production, while rent is the payment for the use of land or property.