Which is an example of withdrawal from the circular flow?

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Multiple Choice

Which is an example of withdrawal from the circular flow?

Explanation:
Withdrawal from the circular flow occurs when part of income is not spent and leaves the flow. Saving is a withdrawal because households set aside part of their income rather than spending it on goods and services, so less money circulates as demand. This reduces overall spending and production unless offset by injections that add to demand, such as government spending, exports, or investment. Those injections increase the flow, while saving removes from it. So saving is the withdrawal.

Withdrawal from the circular flow occurs when part of income is not spent and leaves the flow. Saving is a withdrawal because households set aside part of their income rather than spending it on goods and services, so less money circulates as demand. This reduces overall spending and production unless offset by injections that add to demand, such as government spending, exports, or investment. Those injections increase the flow, while saving removes from it. So saving is the withdrawal.

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