Question

John buys a toy plane from a toy store. The money he pays the store _____ (a. does not affect), (b. is injected back into), (c. leaks out from) the economy through ____ (a. the employees' wages), (b. the importation of new toys), (c. the sales of similar toys) and the taxes paid by the store.

Answer 1

The answers are C and A.

Answer 2

The correct answers are A and A.

When a consumers purchases a good and pays a price for it, that money becomes the income of the employee who works in the store, the salary. Such wage, is still inside the economy, as the employee will decide to either use it to consume products and services himself, or to save it in a bank account. In both cases, the money has been injected back in the economy.