Question

1: Which of the following is an injection into the circular

flow of income?
A) The customs duties levied on luxury imports into the
country
B) The purchase by foreign firms of goods produced by
local firms
c) The higher interest rate offered to local savers, who open
deposits in foreign currency with local financial
institutions
D) The closure of a special government employment
targeted scheme (JEEP)

Answer 1

B

Step-by-step explanation:

Investment, government spending, and exports rapidly boost an economy's whole demand, which further increases the level of income or output. They can be regarded as injections to the circular flow of income.

Answer 2

B) The purchase by foreign firms of goods produced by local firms is an injection into the circular flow of income.