An injection refers to the flow of money into the circular flow model, specifically through government spending, investment, or exports. It adds to the total income and spending within an economy.
Related terms
Leakages: Leakages refer to the opposite of injections in the circular flow model. They represent the outflow of money from the economy, such as savings, taxes, or imports.
Government Spending: Government spending is a specific type of injection where funds are used for public projects, services, or welfare programs.
Investment: Investment is another form of injection where businesses spend money on capital goods like machinery or infrastructure to enhance productivity and expand their operations.