The items listed below are examples of injections or leakages as they relate to the Circular Flow of National Income - Leaving Cert Economics - Question 6 - 2019
Question 6
The items listed below are examples of injections or leakages as they relate to the Circular Flow of National Income. From the list indicate which are injections and... show full transcript
Worked Solution & Example Answer:The items listed below are examples of injections or leakages as they relate to the Circular Flow of National Income - Leaving Cert Economics - Question 6 - 2019
Step 1
Injections
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Answer
Investment Expenditure: This represents spending by businesses on capital goods which helps in economic growth and job creation.
Exports: These refer to goods and services sold to other countries, contributing to national income.
Step 2
Leakages
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Answer
Taxation: This is the money collected by the government which reduces the money supply in the economy, hence a leakage.
Imports: This refers to goods and services purchased from other countries, which represents money flowing out of the economy.
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