Economics (AS & A Level) · May / June 2025 · Paper 12 · Question 17
9708Introduction to the circular flow of income
Based on the circular flow of income, which condition is necessary for an open economy to be in equilibrium?
- AGovernment investment is equal to private investment.
- BPlanned injections are equal to planned withdrawals.
- CSpending by households is equal to taxes collected by government.
- DValue of export earnings is equal to expenditure on imports.
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Correct answer: B. Planned injections are equal to planned withdrawals.
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