5 Questions
Which one of the following is a leakage from the domestic economy in an open economy?
Imports (M)
Which one of the following is an injection into the domestic economy in an open economy?
Exports (X)
Which one of the following is an element of Aggregate Demand in an open economy?
Expenditure on imports (M)
Which one of the following is a leakage from the Circular Flow Model (CFM) in an open economy?
Planned saving (Sp)
Which one of the following is an injection into the Circular Flow Model (CFM) in an open economy?
Planned investment (Ip)
Study Notes
Open Economy and Circular Flow Model (CFM)
- A leakage from the domestic economy in an open economy is Imports.
- An injection into the domestic economy in an open economy is Exports.
- An element of Aggregate Demand in an open economy is Net Exports (X - M).
- A leakage from the Circular Flow Model (CFM) in an open economy is Savings (S), Taxes (T), and Imports (M).
- An injection into the Circular Flow Model (CFM) in an open economy is Investment (I), Government Spending (G), and Exports (X).
Test your knowledge on the fundamentals of an open economy and its impact on domestic prosperity. This quiz covers topics such as overseas trade, external sector changes, the relationship between imports and exports, and more. Challenge yourself to understand the intricate connections between the domestic and global economy.
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