The correct relationship between the money placed in John's savings account and the money that the bank invests in businesses is: a) 1: leaks out from 2: is injected back into
What happens to the money John puts in the paycheck
1: The money placed in John's savings account leaks out from the economy because it's being saved rather than immediately spent or invested directly in businesses.
2: The money that the bank invests is injected back into the economy as it's used to fund various businesses, creating economic activity and contributing to the overall economic cycle.
Question
John works for a factory and receives a weekly paycheck. He typically places 3% of each paycheck into a bank savings account. The money placed in the savings account is (1) the economy. In addition to providing savings accounts to customers, like John, the bank invests money in several businesses. The money that the bank invests is (2) the economy. 1: leaks out from 2: is injected back into a) 1: leaks out from 2: is injected back into b) 1: is injected back into 2: leaks out from c) 1: is withdrawn from 2: is reinvested in d) 1: is reinvested in 2: is withdrawn from