2.4.2: Injections and Withdrawals

Question 1

What is an injection (into the economy)?

Answer 1

-Injections are monetary additions to the economy

Question 2

What is a withdrawal (from the economy)?

Answer 2

• Withdrawals (leakages) are where money is removed from the economy

Question 3

What are the three injections?

Answer 3

• Government spending (G)
• Exports (X)
• Investment (I)

Question 4

What are the three withdrawals?

Answer 4

• Taxes (T)
• Savings (S)
• Imports (I)

Question 5

What is a budget deficit?

Answer 5

• When the government spends more than what they receive in tax

Question 6

Growing vs Shrinking Economy

Answer 6

• Growing= Sum of Injections» Sum of Withdrawals
• Shrinking= Sum of Withdrawals» Sum of Injections