In the circular flow of income, an increase in savings causes
ECONOMICS
JAMB 2009
In the circular flow of income, an increase in savings causes
- A. an increase in imports
- B. a decrease in the income stream
- C. an increase in household consumption
- D. a decrease in exports
Correct Answer: B. a decrease in the income stream
Explanation
An increase in savings will lead to a reduction in the stream of income available for consumption in the household
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