๐ Circular Flow Model
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Last updated 2:54 AM on 6/19/26
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5 Terms
1
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What does the Circular Flow Model show?
The movement of goods, services, income and spending between households, businesses, government and overseas sectors.
2
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What are leakages?
Money leaving the economy through savings, taxes and imports.
3
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What are injections?
Money entering the economy through investment, government spending and exports.
4
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What happens if injections are greater than leakages?
The economy grows and national income increases.
5
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What happens if leakages are greater than injections?
The economy slows down and national income falls.