Which of the following is an example of a leakage from the circular flow of income and expenditure?

A) Government purchases of goods and services
B) Taxes
C) Investment
D) Exports
E) Consumption expenditures

Leakage

In economics, the term refers to a situation where income or resources exit an economy or system rather than being retained or reinvested.

Circular Flow

Describes the continuous movement of goods, services, and money between households and businesses in an economy, illustrating how these entities interact in the markets for resources and products.