2.4.2 Injections and withdrawals Quiz: Pearson Edexcel Economics, Unit 2

The 20 questions

1. Which option is an injection into the circular flow of income?

   • Imports
   • Taxation
   • Investment
   • Saving

2. Which of the following is a withdrawal from the circular flow of income?

   • Saving
   • Investment
   • Exports
   • Government spending

3. What are the three main withdrawals from the circular flow of income?

   • Consumption, taxation, exports
   • Saving, investment, imports
   • Investment, taxation, exports
   • Saving, taxation, imports

4. Which change will reduce the size of the circular flow of income?

   • Higher exports
   • Higher savings
   • Higher government spending
   • Higher investment

5. What happens to national income when total injections exceed total withdrawals?

   • It falls
   • It rises
   • It equals zero
   • It remains constant

6. A country's savings are 50 billion, taxes are 80 billion and imports are 120 billion. What are the total withdrawals?

   • 350 billion
   • 250 billion
   • 150 billion
   • 130 billion

7. A country has investment of 60 billion, government spending of 90 billion and exports of 130 billion. What are total injections?

   • 280 billion
   • 190 billion
   • 340 billion
   • 220 billion

8. Why is business investment classified as an injection into the circular flow?

   • Increases income tax
   • Adds spending
   • Removes liquidity
   • Reduces national output

9. What direct effect occurs if withdrawals exceed injections in the circular flow?

   • Exports increase
   • Inflation increases
   • National income rises
   • National income falls

10. What state is the circular flow in when injections equal withdrawals?

    • Recession
    • Equilibrium
    • Inflation
    • Deficit

11. What is the direct effect of an increase in spending on imports?

    • Higher exports
    • Higher injections
    • Higher withdrawals
    • Lower taxation

12. How does a rise in government taxation affect the circular flow?

    • Increases consumption
    • Reduces leakages
    • Increases withdrawals
    • Increases injections

13. Why are exports classified as an injection into the circular flow?

    • Foreign spending enters
    • Tax revenue falls
    • Domestic spending leaves
    • Import spending rises

14. Which term describes money leaving the domestic circular flow of income?

    • Multiplier
    • Leakage
    • Injection
    • Accelerator

15. When will an increase in injections fail to increase real national output?

    • During a recession
    • With negative growth
    • At full capacity
    • With high unemployment

16. What is the direct impact of a fall in business investment spending?

    • Increased injections
    • Reduced injections
    • Reduced withdrawals
    • Increased exports

17. What net effect does a government budget surplus have on the circular flow?

    • Zero effect
    • Net injection
    • Net withdrawal
    • Increased national income

18. Saved money re-enters the circular flow of income as which injection when lent to firms?

    • Exports
    • Taxation
    • Investment
    • Government spending

19. Which change is most likely to increase the value of UK export injections?

    • Pound appreciation
    • Pound depreciation
    • Rising domestic VAT
    • Higher import tariffs

20. Government spending is 40 billion and tax revenue is 35 billion. What is the net injection from the government sector?

    • 40 billion
    • 5 billion
    • -5 billion
    • 75 billion

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