WBCS.LIVE practice question

Which of the following is NOT correct regarding circular flow of income?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. The income of one sector becomes the expenditure of the other.
  2. Savings as well as government expenditure are injections to the circular flow.
  3. In a circular flow, leakages are equal to injections.
  4. The real flow and monetary flow move in a circular manner in an opposite direction.

Correct answer and explanation

Correct answer: Savings as well as government expenditure are injections to the circular flow.