The document discusses leakages and injections in macroeconomic analysis. Leakages such as savings, taxes, and imports divert income away from domestic output. Injections such as investment, government spending, and exports add spending to the circular flow of income. Specifically, the key types of leakages are savings, taxes, and imports. The key types of injections are investment, government spending, and exports.

1. MBA 02- MACRO
ECONOMIC ANALYSIS
TOPIC: LEAKAGES AND
INJECTIONS
Reported by:
Hazel R. Tanilon

2. LEAKAGES
 Income not spent directly on domestic
output but instead diverted from the
circular flow.
 They “leak” income away from the
product markets, making less available for
factor payments and household income.

3. TYPES OF LEAKAGES
 Savings (S) - When households do not spend
all of their income, money
leave the circular flow.
 Taxes (T) - Collection provided by households
and firms to government.
 Imports (M) - When Filipinos buy foreign goods
and services, money leave the
circular flow.
 L = S + T + M
 LEAKAGES = SAVINGS + TAXES + IMPORTS

4. INJECTIONS
 is an addition of spending to the circular
flow of income.
 They “inject” revenue into the product
markets that is used for factor payments
and become household income.

5. TYPES OF INJECTIONS
 Investment (I) – When Businesses purchase new
capital goods, money enters the
circular flow.
 Government Spending (G) -When the government
redistributes this income in the form
of welfare payments, that is a form
of government spending back into
the economy.
 Exports (E) - generates income for the exporters
from overseas residents
 INJECTIONS = INVESTMENT + GOVERNMENT
SPENDING + EXPORTS
 J = I + G + X

6. TYPES OF INJECTIONS
 Investment (I) – When Businesses purchase new
capital goods, money enters the
circular flow.
 Government Spending (G) -When the government
redistributes this income in the form
of welfare payments, that is a form
of government spending back into
the economy.
 Exports (E) - generates income for the exporters
from overseas residents
 INJECTIONS = INVESTMENT + GOVERNMENT
SPENDING + EXPORTS
 J = I + G + X