Chapter 17, Problem 8AA

To determine

To choose:The suitable word that best completes the sentence.

Explanation of Solution

The suitable word that best completes the sentence is remove.

To maintain the circular flow of income and output, income has to flow continuously from businesses and consumers. When consumers keep some income in form of savings, that money is removed from the supply of money.

Economics Concept Introduction

Introduction:

Circular flow of income and output- The theory of circular flow of income and output states that income flows continuously between the businesses and consumers. The money income flows from businesses to households in form of wages, rent and interest. This money income flows from households to businesses as payments for products and services from consumers.