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Circular flow of income
An income flow in an economy where the value of the output produced is equivalent the total income earned from its production, which is also equivalent to the expenditures spent on purchasing that output.
Injections
The addition of funds into the income flow through investment, government spending, or exports.
Leakages
The removal of funds from the income flow, represented by savings, taxes, or imports.
National income
The total income of an economy, composed of the sum of wages, interest, rent and profit.
National output
The total value of the final goods and services produced by an economy, often measured by real GDP. It is also known as aggregate output.