can we know the exact amount of injection and leakages? how will we find the equilibrium achieved then?
Dear Student,
'Leakages' and 'Injections' are used to represent those variables that cause withdrawal from or addition to the flow of income in an economy. Leakages basically refer to those variables that lead to withdrawals of money from the circular flow of income, for example saving, taxes and imports. Injections, on the other hand, indicate those variables that result in addition to the circular flow of income, for example, investment, exports, subsidies pumps back money into the circular flow.
We can't ascertain the amount of leakages and injections in the economy because there is lot of black marketing and corruption in the economy, due to which the government is unable to track the number of illegal transactions in economy.
Regards
'Leakages' and 'Injections' are used to represent those variables that cause withdrawal from or addition to the flow of income in an economy. Leakages basically refer to those variables that lead to withdrawals of money from the circular flow of income, for example saving, taxes and imports. Injections, on the other hand, indicate those variables that result in addition to the circular flow of income, for example, investment, exports, subsidies pumps back money into the circular flow.
We can't ascertain the amount of leakages and injections in the economy because there is lot of black marketing and corruption in the economy, due to which the government is unable to track the number of illegal transactions in economy.
Regards