Concept of Injections.

Injection

Meaning:-It is an addition to the circular flow of income. It increases the size of circular flow.

Injection = I+G+K

I=Investment 

G=Government purchase 

K=Exports 

(Expansion)

Leakages

Meaning:-It is a withdrawl from a circular flow of income. It reduces the size of circular flow.

Leakages=S+T+M

S=Savings 

T=Tax

M=Imports

(Contraction)

For stability in income 

L=S

Or

S+T+M = I+G+K