1
Q
What are leakages?
A
-Investment spending on new capital goods (I)
-Exports of goods and services (X)
-Government spending on public services (G)
2
Q
What are withdrawals(leakages)?
A
-Savings (S)
-Imports of goods and services (M)
-Taxation (T)
3
Q
In an equilibrium injections must be what?
A
Equal to withdrawals and so the national income remains the same.
4
Q
If the sum of injections is greater than the sum of leakages/withdrawals then the economy is what?
A
Growing.
5
Q
If injections are smaller than withdrawals what does this mean for the economy?
A
It is shrinking.
