Circular Flow of Income — Injections and Withdrawals

National Income · Macro
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Households Firms Markets Real flow (inner loop) Money flow (outer loop) Withdrawals (S, T, M) Injections (I, G, X)
Withdrawals (saving, taxation, imports) leave the circular flow and injections (investment, government spending, exports) enter it. National income rises when injections are greater than withdrawals and falls when withdrawals are greater than injections.