CIMA BA1 · Chapter 1 · Question 1 of 10
In the circular flow of income model, which of the following is an injection into the flow of income?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Government spending on goods and services
Explanation
Injections add spending to the circular flow that does not originate from domestic households' consumption: investment, government spending and exports. Saving, taxation and imports are withdrawals (leakages) because they take income out of the flow.
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