If leakages from, and injections into, the spending stream are equal, the level of economic activity will not change.

Question

Quizplus · Accepted Answer

When leakages (such as savings, taxes, and imports) are equal to injections (such as investment, government spending, and exports) into the economy, the level of economic activity remains stable because the total spending matches the total output, leading to no net change in the economic cycle.

If Leakages From, and Injections Into, the Spending Stream Are