In Terms of Leakages and Injections, What Role Do Financial

Multiple Choice

In terms of leakages and injections, what role do financial institutions play in the macroeconomy?

A) Financial institutions are responsible for the level of transfer payments and retained earnings, an important source of leakages and injections in the economy.
B) Financial institutions control the size of the multiplier effect, which indirectly affects the amount of injections and leakages into the economy.
C) Financial institutions accept leakages in the form of household and business saving and then channel those funds to household and business borrowers, which creates injections back into the economy.
D) Financial institutions are the most important source of nonincome-determined spending in the economy, affecting the size and timing of the injections and leakages.