Question

In the circular flow of income and spending, that is, the basic flow of income and spending between households and firms supplemented by the foreign, financial and government sectors...

1. Exports are leakage from the circular flow
2. Savings are injections into the circular flow
3. Imports are injections into the circular flow
4. Taxes are leakages from the circular flow

B. If the South African reserve Bank decides to decrease the repo rate, the quantity of money created will............ (Ceteris paribus).

1. Decrease
2. Remain the same
3. Increase
4. Cannot be determined

Answer 1

A-3

B-3