In this model, injections are external sources of income that enter the flow, boosting economic activity. Injections counterbalance leakages (savings, taxes, and imports) that withdraw money from ...

The circular flow model of economics shows how money moves through an economy in a constant loop from producers to consumers and back again, factoring into a nation’s GDP.

Both real flows and money flows are part of the circular flow of income model, each being two sides of the model. While real flows focus on goods and services, money flows focus on payments for ...