Economic Awareness - Sectors of Indian Economy
In the three-sector circular flow model, which of the following represents a leakage?
In the three-sector circular flow model, which of the following represents a leakage?
easy Q3 of 15
Step-by-Step Solution
Step 1: Understand leakages in three-sector model
Leakages are withdrawals from the flow, reducing income circulation.Step 2: Identify leakages
Taxes collected by government reduce disposable income, thus are leakages. Government spending and investment are injections. Exports are injections in four-sector model.Final Answer:
Taxes collected from households → Option AQuick Check:
Leakage in three-sector model = Taxes ✅
Quick Trick: Leakages include savings, taxes, and imports.
Common Mistakes:
MISTAKES- Confusing government spending as leakage instead of injection.
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