2.4.2

Question 1

What are leakages?

Answer 1

-Investment spending on new capital goods (I)
-Exports of goods and services (X)
-Government spending on public services (G)

Question 2

What are withdrawals(leakages)?

Answer 2

-Savings (S)
-Imports of goods and services (M)
-Taxation (T)

Question 3

In an equilibrium injections must be what?

Answer 3

Equal to withdrawals and so the national income remains the same.

Question 4

If the sum of injections is greater than the sum of leakages/withdrawals then the economy is what?

Answer 4

Growing.

Question 5

If injections are smaller than withdrawals what does this mean for the economy?

Answer 5

It is shrinking.