Question

State the relationship between leakages and injections when they’re equal

Answer 1

Answer:

When leakages equal injections, total spending will equal total output and the macroeconomy will be in equilibrium. ... If injections exceeds leakages, then total spending exceeds total output and the level of national output will rise. Equilibrium may be reached at a level of GDP in which there is unemployment.

Explanation:

Answer 2

Injections include investment spending, government spending and exports. When leakages equal injections, total spending will equal total output and the macroeconomy will be in equilibrium. If leakages exceed injections, then total output exceeds total spending and the level of national output (GDP) will fal