Unit 1.1 · What Is Economics? Scarcity, Choice, and Economic Models
Leakages and Injections
AO2AO4
Syllabus Requirement
Identifies savings, taxes, and imports as leakages and investment, government spending, and exports as injections, linking them to changes in national income.
Assessment Objectives
AO2Application and Analysis
AO4Use of Appropriate Skills
Summary
Leakages and injections are key concepts in the circular flow of income model, which illustrates how money moves through an economy. Leakages, such as savings, taxes, and imports, withdraw money from the economy, while injections, including government spending, investment, and exports, add money to it. Understanding these concepts helps explain the dynamics of economic activity and equilibrium.