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15 June, 09:25

Which statement is true?

Savings are a leakage in the circular flow of income.

Households pay wages to businesses.

Exports are leakages in the circular flow of income.

Taxes paid to the government have no direct effect on the economy.

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Answers (1)
  1. 15 June, 10:14
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    Hewo, Your answer is "Taxes paid to the government have no direct effect on the economy". The First is incorrect because savings save money, and do not leak any income. Number 2 is incorrect because Companies and Businesses pay wage to employees, and not employees pay to the business. And Exports, earn money, because you sell and export a product. Hence the logical answer is #4.
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