why are imports, which bring goods into a country, considered a leakage factor? imports do not generate…

why are imports, which bring goods into a country, considered a leakage factor? imports do not generate domestic income. domestic industry loses ground as imports increase. imports are taxed heavily, which is a secondary leakage factor. the money paid to producers of imports leaves the country.

why are imports, which bring goods into a country, considered a leakage factor? imports do not generate domestic income. domestic industry loses ground as imports increase. imports are taxed heavily, which is a secondary leakage factor. the money paid to producers of imports leaves the country.

Answer

Brief Explanations:

In the circular - flow model of an economy, when a country imports goods, the money paid for those imports goes to foreign producers. This means that domestic income is flowing out of the country, which is why imports are considered a leakage factor.

Answer:

The money paid to producers of imports leaves the country.