Which of the following is NOT correct regarding circular flow of income?

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Step-by-step analysis:

1. Statement (1): "Savings as well as government expenditure are injections to the circular flow." — Incorrect. Savings (S) are a leakage from the income-expenditure stream, while government expenditure (G) is an injection. They are opposite types of flows, so this statement is false.

2. Statement (2): "The income of one sector becomes the expenditure of the other." — Correct. In circular flow models, one sector's income is another sector's expenditure.

3. Statement (3): "In a circular flow, leakages are equal to injections." — Correct in equilibrium: $	ext{Leakages} = 	ext{Injections}$ ensures a steady-state circular flow.

4. Statement (4): "The real flow and monetary flow move in a circular manner in an opposite direction." — Correct. Real flows (goods, services, factors) move one way while monetary flows (payments, wages) move in the opposite direction.

Only statement (1) is not correct, so the correct option is "1 only", which corresponds to option (a).

FINAL_ANSWER: a

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