Question

Which of the following is not an injection into the circular flow of national income?

a) Government expenditure

b) Government salaries paid to civil servants

c)Government taxation

d)The purchase of a domestically produced good by a foreign company​

Answer 1

Answer:

b

Explanation:

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Answer 2

Option c is the correct answer.

Government taxation is not an injection into the circular flow of national income.

1. Injection means introduction of investment, government expenditure and exports. Whereas leakages comprise of taxes, savings and imports.
2. When government expenditure is done it is for public welfare so government buys goods and services for the public and gives money to firms. Therefore it is an injection.
3. Government salaries paid to civil servants are an injection because money is being given to households.
4. Government taxation is a leakage as money is being withdrawn from firms and households.
5. The purchase of a domestically produced good by a foreign company​ is injection as receipts from exports.