Question

Match each economic activity with the correct economic term.

Answer 1

Correct matches

receiving $5 for washing your father’s car (incentive)

leakage in the US economy (a person in the United States purchasing a car made in Germany)

paying part of your income to the government (taxation)

injection in the US economy (a person in China purchasing an
American mobile phone)

$5 is an incentive because it motivates.

Tax is a proportion of income paid to the government in a progressive rate. (

When a person in the US buy outside, he reduces the flow of income (leakage).When someone buys inside he introduces an income (injection in the economy).