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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.

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2mo ago

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Distinguish between withdrawals and injection expenditure in the economy by the Government?

withdrawals and injections are both a part of the circular flow of income. Injections are things that are providing finance or services into the economy for example exports. Withdrawals on the other hand are the things that are being taken out of the economy such as imports. If withdrawals are bigger then injections the country would be facing a deficit and negative economic growth. If withdrawals are less then injections then a country would be facing a budget surplus and economic growth.


What is the impact of Injections into the spending stream?

The impact of injections into the spending stream is that injections add to main income spending stream in economy . Often times , people think of government spending as an injection , but that is misleading . For the government to ''inject'' into the spending stream , it must first take something from it . As you would if you were to donate blood . Your blood cannot be donated to another body if it has not yet been taken from you . Injections are an addition to the income of firms which do not normally arise from the expenditure of households e.g. changes in investment , government spending or exports .


How do injections and withdrawals effect economic activity?

Injections include Export revenue, Investment and Government expenditure. Withdrawals include Saving, Tax, Import expenditure. All of it affects the component of Aggregate Demand hence affects the economic activity. For e.g. High savings would mean low consumption. This would cause some firms to make losses and leave the industry etc.


When withdrawals exceed injections national income will do what?

When planned withdrawals are more than planned injections, there is too little aggregate demand. I'm no economics expert so i don't know whether this would lead to a downward mutipler or a negative accelerator effect. Withdrawals are savings, taxes and imports and it seems to me that if savings increase, there would be a negative accelerator effect, but if imports increase, there would be a downward multiplier, but don't take my word for it.


What would happen if there were no agriculture?

people would not survive

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