13
QuizMultiple Choice

Introduction to Macroeconomics

Question 13 • (Galli)WCA 2221 Civics/Economics 1st nine weeks 26-27

Why are imports, which bring goods into a country, considered a leakage factor?

Answer
A
Imports do not generate domestic income.
B
Domestic industry loses ground as imports increase.
C
Imports are taxed heavily, which is a secondary leakage factor.
D
The money paid to producers of imports leaves the country.

Explanation

Imports are a leakage because spending on goods made abroad sends money out of the domestic economy. That money goes to foreign producers rather than circulating as income for domestic businesses and workers. Therefore, the best choice is “The money paid to producers of imports leaves the country.”

AI-written and checked against the verified answer.

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