What do you mean by leakage in income flow?

1.	What do you mean by leakage in income flow?
Answer» Leakage is usually used in relation to a particular depiction of the flow of income within a system, referred to as the circular flow of income and expenditure, in the Keynesian model of economics. Within this depiction, leakages are the non-consumption uses of income, including saving, taxes, and imports. “Leakage” is that economic concept, which has negative impact on flow of income.

Answer»

Leakage is usually used in relation to a particular depiction of the flow of income within a system, referred to as the circular flow of income and expenditure, in the Keynesian model of economics. Within this depiction, leakages are the non-consumption uses of income, including saving, taxes, and imports.

“Leakage” is that economic concept, which has negative impact on flow of income.

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What do you mean by leakage in income flow?

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