Leakages in the Circular Flow Model Are

question 81

Multiple Choice

Leakages in the circular flow model are

• A) caused by people not acting rational.
• B) possible when unemployment exists.
• C) reflected in the vertical long-run aggregate supply curve.
• D) caused by people saving instead of spending.

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Definitions:

Real Exchange Rate

The rate at which one country's currency can be exchanged for another's, adjusted for inflation, reflecting the buying power between the two currencies.

Arbitragers

Individuals or entities that seek to profit from price discrepancies of the same asset in different markets or forms.

Russian Rubles

The currency used in Russia, which acts as a medium of exchange within the Russian economy.

Real Exchange Rate

The real exchange rate measures the value of one currency against another, adjusted for inflation, reflecting the purchasing power of one country's currency in another country.