Q6 · Practice questionSimple familiar1 mark
QUESTION 6
In a five-sector circular-flow model, total injections are $260 billion and total leakages are $290 billion. If these flows persist initially, the model predicts
(A)
upward pressure on national income.
(B)
downward pressure on national income.
(C)
no pressure on national income.
(D)
a guaranteed increase in the price level.
WORKED SOLUTION
1 markAnswer B
Answer
B
Working
Leakages exceed injections by $30 billion. Spending withdrawn exceeds spending added, so income and output tend to contract until flows adjust.
Marking criteria
- Select B. [1 mark]
Practice question aligned to the current QCAA syllabus; review the worked solution and marking criteria.
View the QCAA syllabus