Five-Sector Circular Flow

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4 Terms

1
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What are the five sectors in the circular flow model?

Households, Producers, Government, Financial, Overseas.

2
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What are injections in the circular flow?

Investment (I), Government spending (G), Exports (X).

3
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What are leakages in the circular flow?

Savings (S), Taxes (T), Imports (M).

4
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What happens if injections > leakages?

Economic activity expands, raising production, income, and expenditure.