Which best describes what injector factors bring to an economic system?
Asked by wiki @ in Business viewed by 339 People
Answered by wiki @
Answering the question, money is the best injector factor to bring to an economic system.
Injection occurs when money is injected into the economy from sources such as investment, exports and government spending.
Money injected into the Economy through these sources helps the businesses to produce more goods and the consumers to buy more goods and services which also have a positive effect on the circular flow of economic activities.
Further Explanation
Money is injected into the economy through the funding of several programs by the government, such as farm subsidies and social security payments. Money is also injected into the economy from the exports of goods and services.
Companies that spend money to buy capital goods are also another source through which money is injected into the economy.
The flows of money or how money is injected into the economy is what circular flow model demonstrates. The circular flow model indicates that money flows from the producers to the workers as salaries and also flows back to the producer in return for products.
However, government taxes, imports, and savings are regarded as leakages because savings are given out as loans, imports take money out of the economy as well as government taxes.
Therefore, money is the best injector factor to bring to an economic system.
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