Question

Use what you have learned about the circular flow model and the drop-down menus to complete these sentences.

The government sector collects taxes, which are considered
.

Households provide
to firms, which assists in the production of goods and services.

The foreign sector purchases exports, which are considered
.

Answer 1

The government sector collects taxes, which are considered leakages.

Households provide factors of production (e.g., labor) to firms, which assists in the production of goods and services.

The foreign sector purchases exports, which are considered injections.