The circular flow
The circular flow
The circular flow shows income and spending moving between households and domestic firms. Injections add spending to the flow: investment is firms' spending on capital goods, government spending is government purchases from domestic firms, and exports are foreign purchases of domestic output. Withdrawals remove spending or income from the domestic flow: saving and taxation originate from households, while imports represent household and firms' spending on foreign output.
Step-by-step lessons covering Edexcel A A Level Economics 2.4.2 Injections and withdrawals for A Level Economics. Each lesson works through exam-style questions in Paper 1, Paper 2 and Paper 3 format. Start with the core supply-and-demand models before moving on to the more evaluation-heavy macroeconomic policy topics.