All of the following are injections into the 5 sector circular flow diagram except:(1 Point)ExportsFinancial InvestmentTaxesGovernment Spending
Question
All of the following are injections into the 5 sector circular flow diagram except:
- Exports
- Financial Investment
- Taxes
- Government Spending
Solution
The 5 sector circular flow diagram includes households, firms, government, financial markets, and international trade. Injections are the elements that introduce money into this flow.
- Exports: These are considered injections because they bring in money from foreign consumers into the domestic economy.
- Financial Investment: This is also an injection as it introduces money into the economy, particularly into firms for growth and expansion.
- Taxes: Taxes are not considered an injection. Instead, they are a leakage or withdrawal from the circular flow. They represent money taken out of the system by the government.
- Government Spending: This is an injection into the economy as it represents money that the government is putting back into the system, often through public services or infrastructure.
So, the answer is Taxes. They are not an injection into the 5 sector circular flow diagram.
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