mention two types of leakages found in circular flow of income
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The circular flow of income is a type of economic model which represents the flow of money goods between economic bodies
Explanation:
- While a leakage is the diversion of the money or resources using an irregular way
- Some consumers find out ways to take money out of the circle
- It can be in the form of illegal taxes or thousands of dollars social security check money
Learn more about social security here:
Define social security
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The two type of leakages are savings , imports.
Explanation:
- Circular flow of income refers to flow of factors of production such as( land labour , labour , capital and entrepreneur) , factor payments such as( rent, wages , interest, profit), goods and services) goods and services and payments for goods and services within the different sectors( household, firm, government and rest of the world)of the economy.
- Leakage refers to withdrawal of the money from the circular flow of income.
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Explain factors of production?
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Importance of circular flow?
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