What is the relationship between injections and leakages in the circular-flow model?

Question

Quizplus · Accepted Answer

In the circular-flow model, injections (such as investment, government spending, and exports) and leakages (such as savings, taxes, and imports) must balance in equilibrium for the economy to function properly. In other words, leakages must equal injections so that there is no excess supply or demand in the markets. Therefore, the correct statement is option C: "Leakages minus injections equals zero in equilibrium."

What Is the Relationship Between Injections and Leakages in the Circular-Flow