JAMB Economics 2009 Objective — Question 27

Question 27 of 50 from the Joint Admissions and Matriculation Board (JAMB) Economics 2009 Objective paper, with the correct answer and a full explanation.

In the circular flow of income, an increase in savings causes

A. an increase in imports
B. a decrease in the income streamCorrect
C. an increase in household consumption
D. a decrease in exports

Explanation

Saving is a withdrawal (leakage), and it causes a decrease in the income stream on the circular flow.

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