Additions and Withdrawals
Additions and Withdrawals
An injection is spending added to the circular flow from outside the household-to-firm loop. A leakage, also called a withdrawal, is income taken out of the flow rather than passed on as domestic spending. Investment is firms' spending on capital goods, government spending is spending by the government, and exports are spending by overseas buyers on domestic goods and services.
Step-by-step lessons on CIE Intl A Level Economics 4.2.2 injections and leakages (multiplier not required). Each one builds up to exam-style questions.