When an individual buys foreign goods, this spending is known as .....

The correct answer is Option (3) → Leakages from economy.

When an individual buys foreign goods (imports), money flows out of the domestic economy to pay for goods produced abroad. This outflow is considered a leakage from the circular flow of income, because:

• It reduces domestic income and demand.

• The money spent does not circulate within the home economy, but benefits the foreign economy instead.