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JAMB Economics 2007 Question 27

Question 27

National Income

In the circular flow of income model, the outflow variables represent

  1. A.injections
  2. B.income
  3. C.leakages
  4. D.expenditure
Show the answer and explanation

Answer: C (leakages)

Explanation

Savings, taxes and imports flow out of the circular flow; these are called leakages (withdrawals).