How does the leakages and injections in the aggregate expenditure model influence the level of GDP of an economy?
Leakages = Injections
Leakages in basements can be triggered by several factors. When basement walls are not waterproofed from the exterior, they may become vulnerable to moisture seepage during heavy rainfall. To prevent this, discuss a suitable exterior waterproofing option with your contractor and protect your basement from standing water.
if leakages are greater than injection the circular flow will be in disequilibrium because more money is leaving the circular flow
Keynesian model is able to show how leakages and injections can influence the economy. AD-AS model is able to show changes in prices (inflation).
If injections into an economy exceed leakages, it results in an overall increase in economic activity. This typically leads to higher levels of spending, investment, and consumption, which can stimulate growth and create jobs. However, if this imbalance continues for an extended period, it may also lead to inflationary pressures as demand outstrips supply. Overall, maintaining a balance between injections and leakages is crucial for sustainable economic health.
equilibrium
Spending leakages and injections refers to the income generated in production that does not completely return to the product markets in form of consumer spending. The macroeconomic model balances the non-consumption expenditures on the injections and the non-consumption uses of the leakages.
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Leakages = Injections
Leakages in basements can be triggered by several factors. When basement walls are not waterproofed from the exterior, they may become vulnerable to moisture seepage during heavy rainfall. To prevent this, discuss a suitable exterior waterproofing option with your contractor and protect your basement from standing water.
if leakages are greater than injection the circular flow will be in disequilibrium because more money is leaving the circular flow
Keynesian model is able to show how leakages and injections can influence the economy. AD-AS model is able to show changes in prices (inflation).
what do you want me to comment about leakeges and injection
When injection exceeds leakage aggregate demand will high it followed by high employment , with rise in price economic growth will ensures . For detail explanation you can take from Tutorpace
Leakages refer to money flowing out of the circular flow of income, such as savings, taxes, and imports, which reduce the total spending in the economy. Injections, on the other hand, refer to money flowing into the circular flow of income, such as investment, government spending, and exports, which add to the total spending in the economy. Together, leakages and injections help maintain equilibrium in the economy.
Injections = Leakages (J=W) Iu=0 (unplanned investment = 0) one more condition
You have leakages from your circular flow.