Section: Principles of Macroeconomics

12) Which of the following are leakages in circular flow?

1. saving and imports
2. consumption and saving
3. exports and saving
4. imports and saving

Consumption and saving are leakages in the circular flow because when you consume the money is taken out of the public and exchanged into the business sector. Savings is also a leakage because the money taken out of the public sector and put into the banking sector.