Question

Based on the circular flow of income, identify from the following items what can be considered as a withdrawal/leakage in the South African economy.

i.    Government spending on wages of civil servants.

ii.    A local resident purchasing an imported capital good.

iii.   Swaziland purchasing a inyala from the Denel Ltd a South African government owned defence and military equipment manufacturer.

1. iv.   A decision by the government to purchase French nuclear energy technology instead of the Russian technology.

Answer 1

2..A local resident purchasing an imported capital good.

In this case money is withdrawn from the economy