Question

Sherry Garcia begins her first job after graduating from college and starts putting money away in a savings account. She believes she has removed this money from the circular flow between buyers and sellers that she studied in Introduction to Business. Is Sherry correct in her decisioon ?

Answer 1

Answer:

No sherry is not correct.  

Explanation:

The circular flow of income is the movement of money and other resources in an economy.

Savings and investments are  one of the factors that affects circular flow in an economy.

savings  is the part of income which is not spent immediately but reserved for future purposes.

when savings are made in the bank, they are later  returned into the economy by the bank. The bank turns the savings to investment, that will yield interest for the bank in form of loans.  

Therefore Sherry's decision is incorrect because even though she has saved this money, the bank will  in turn invest the money back into the circular flow.