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Yogita Ingle 6 years ago
A leakage means withdrawl of a part of income (money) from circular flow of income.
For instance, savings and taxes by households and firms as well as import payments are forms of leakage. Injections are addition of money to the circular flow of income, e.g., investments, government expenditure, export payments.
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Yogita Ingle 6 years ago
- A tax is a compulsory levy imposed by a public authority against which tax payers cannot claim anything.
- Rates refer to local taxation, i.e., taxation levied by (or for) local rather than central government.
- Fee is a payment to defray the cost of each recurring service undertaken by the government, primarily in the public interest.
- A licence fee is paid in those instances in which the government authority is invoked simply to confer a permission or a privilege.
- The government acts like a business- person and the public acts like its customers. The government may either sell goods or render services like train, city bus, electricity, transport, posts and telegraphs, water supply, etc. The government also earns revenue from the production of commodities like steel, oil, life-saving drugs, etc.
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Yogita Ingle 6 years ago
Aggregate supply means the total money value of goods and services produced in an economy in a year.
They are (i) the supply of consumer goods and services in a year, (ii) the supply of capital goods or investment goods as they help in producing further goods. Aggregate supply is the same thing as national product. The money value of national product of goods and services is distributed among the various FACTORS OF PRODUCTION as wage, rent interest and profits as rewards for the contribution of factors to the national product. The aggregate of wages, rent, interest and profit is called national income.
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Yogita Ingle 6 years ago
International trade or forgein trade is referred to as the exchange or trade of goods and services between different nations. This kind of trade contributes and increases the world economy. The most commonly traded commodities are television sets, clothes, machinery, capital goods, food, and raw material, etc.,
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Khushi Varshney 6 years ago
1Thank You