2.4.2 - Injections & Withdrawals

Question 1

What Are Injections?

Answer 1

Adds money to the circular flow of income and increases its size.

Question 2

What Are The Examples Of Injections?
(3 Points)

Answer 2

~ Government spending (G).

~ Investment (I).

~ Exports (X).

Question 3

What Are Withdrawals / Leakages?

Answer 3

Remove money from the circular flow of income and reduces its size.

Question 4

What Are The Examples Of Withdrawals?
(3 Points)

Answer 4

~ Taxes (T).

~ Savings (S).

~ Imports (M).

Question 5

What Happens If The Sum Of Injections Is Greater Than The Sum Of Withdrawals?

Answer 5

Economic growth occurs.

Question 6

What Happens If The Sum Of Withdrawals Is Greater Than The Sum Of Injections?

Answer 6

Fall in real GDP.