Which of the Following Is an Example of a Leakage

question 75

Multiple Choice

Which of the following is an example of a leakage from the circular flow of income and expenditure?

• A)Investment
• B)Imports
• C)Government purchases
• D)Exports
• E)Transfer payments

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Definitions:

Fixed Proportions

A production condition where inputs must be used in constant ratios to each other, without substitution possibilities, to produce a particular output.

Demand Functions

Mathematical representations that describe how the quantity demanded of a good or service changes in response to price changes and other factors.

Income

the total amount of money received by an individual or group over a specified period, often derived from work, property, or investments.

Homothetic Preferences

A situation in consumer theory where preference ratios are consistent across different income levels or price changes.