Question

Which statement is true?

a) Savings are a leakage in the circular flow of income.
b) Households pay wages to businesses.
c) Exports are leakages in the circular flow of income.
d) Taxes paid to the government have no direct effect on the economy.

Answer 1

a) Savings are a leakage in the circular flow of income.

Answer 2

the true statement would be: d) Taxes paid to the government have no direct effect on the economy. The tax that paid to the government will have indirect effect on people's life, such as used for military budget, building public service that not all people use, and distributed to welfare