Q21. "In the two-sector circular flow of income model, the economy is in equilibrium because there are no injections and no leakages — total income equals total output equals total expenditure."

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Asked on May 4, 2026Chemistry

This chemistry question involves key chemical concepts and calculations. The detailed solution below walks through each step, from identifying the reaction type to computing the final answer.

Accepted Answer · 2026-05-04T10:58:42.028Z

Here are the answers to your questions: Q21. "In the two-sector circular flow of income model, the economy is in equilibrium because there are no injections and no leakages — total income equals total output equals total expenditure." FALSE Justification: The two-sector model includes savings as a leakage and investment as an injection, which must be equal for equilibrium. Q22. "When investment (I) is greater than savings (S) in the three-sector model, the economy will contract and GDP will fall." FALSE Justification: When investment is greater than savings, it indicates an increase in aggregate demand, which will cause the economy to expand and GDP to rise. Q23. "Export revenue is classified as a LEAKAGE from the circular flow of income because money leaves the country to purchase goods from overseas." FALSE Justification: Export revenue is an injection into the circular flow of income because money enters the country from overseas sales. Q24. "A RESTRICTIVE monetary policy involves BPNG decreasing interest rates and reducing the LGS ratio in order to stimulate economic activity during a recession." FALSE Justification: A restrictive monetary policy involves increasing interest rates and increasing the LGS ratio to slow down economic activity, not stimulate it. Q25. "Progressive taxation means that lower-income earners pay a HIGHER percentage of their income in tax than higher-income earners." FALSE Justification: Progressive taxation means that higher-income earners pay a higher percentage of their income in tax than lower-income earners. Q26. "Stagflation describes a simultaneous period of high inflation and high unemployment — during which the Philip's Curve shifts to the RIGHT." TRUE Justification: Stagflation is characterized by both high inflation and high unemployment, which is graphically represented by an outward shift (to the right) of the Phillips Curve. 3 done, 2 left today. You're making progress.

Accepted Answer · 2026-05-04T10:58:42.028Z

Here are the answers to your questions: Q21. "In the two-sector circular flow of income model, the economy is in equilibrium because there are no injections and no leakages — total income equals total output equals total expenditure." FALSE Justification: The two-sector model includes savings as a leakage and investment as an injection, which must be equal for equilibrium. Q22. "When investment (I) is greater than savings (S) in the three-sector model, the economy will contract and GDP will fall." FALSE Justification: When investment is greater than savings, it indicates an increase in aggregate demand, which will cause the economy to expand and GDP to rise. Q23. "Export revenue is classified as a LEAKAGE from the circular flow of income because money leaves the country to purchase goods from overseas." FALSE Justification: Export revenue is an injection into the circular flow of income because money enters the country from overseas sales. Q24. "A RESTRICTIVE monetary policy involves BPNG decreasing interest rates and reducing the LGS ratio in order to stimulate economic activity during a recession." FALSE Justification: A restrictive monetary policy involves increasing interest rates and increasing the LGS ratio to slow down economic activity, not stimulate it. Q25. "Progressive taxation means that lower-income earners pay a HIGHER percentage of their income in tax than higher-income earners." FALSE Justification: Progressive taxation means that higher-income earners pay a higher percentage of their income in tax than lower-income earners. Q26. "Stagflation describes a simultaneous period of high inflation and high unemployment — during which the Philip's Curve shifts to the RIGHT." TRUE Justification: Stagflation is characterized by both high inflation and high unemployment, which is graphically represented by an outward shift (to the right) of the Phillips Curve. 3 done, 2 left today. You're making progress.

Q21. "In the two-sector circular flow of income model, the economy is in equilibrium because there are no injections and no leakages — total income equals total output equals total expenditure."

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Q21. "In the two-sector circular flow of income model, the economy is in equilibrium because there are no injections and no leakages — total income equals total output equals total expenditure."

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