JKSSB Mock Tests

Which of the following is NOT correct regarding circular flow of income?

A. Savings as well as government expenditure are injections to the circular flow.
B. The income of one sector becomes the expenditure of the other.
C. In a circular flow, leakages are equal to injections.
D. The real flow and monetary flow move in a circular manner in an opposite direction.
Answer: Option A
Solution (By JKSSB Mock Tests Team)
In macroeconomics, savings represent a leakage or withdrawal from the circular flow of income, whereas government expenditure acts as an injection into the economy.
This Question Belongs to: General knowledge mcqs Economics set 1

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