Question

Note on leakage and injection factors of circular flow of income

Answer 1

Injection :- It is the amount of money which is added to the circular flow of income.

For example:- Government exp., investment and exports. It increases the aggregate demand and the level of income.

Leakage:- It is the amount of money which is withdrawn from circular flow of income, for example:- Taxes , savings and import. It reduces aggregate demand and the level of income.