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Investment is an injection.
Figure 26.2 incorporates the saving leakage and the investment injection. The diagram concentrates on money flows; for purposes of simplification the real flows (i.e. goods and services) have been omitted.
A MORE REALISTIC MODEL:-
To make the model more realistic it is necessary to take into account the role that the government and the foreign trade sectors take in determining the level of economic activity...
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goods and services) have been omitted.
A MORE REALISTIC MODEL:-
To make the model more realistic it is necessary to take into account the role that the government and the foreign trade sectors take in determining the level of economic activity.
FOREIGN TRADE:-
Some part of the expenditure of households does not flow back to domestic firms because households buy foreign products as well as home produced products...
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