Money leaving the economy through savings, taxes, and imports is called

• A. Injections
• B. Globalisation
• C. Closed economy
• D. Leaks

Answer: (D)

In the circular flow of income, money can move in two directions: into the domestic economy (injections) and out of it (leakages). Savings, taxes, and imports withdraw spending from the domestic economy, so they’re described as leaks or withdrawals. They reduce the flow of money available for domestic consumption and investment. This is why they are contrasted with injections, which add to the economy through investment, government spending, and exports. So, when money leaves the economy via savings, taxes, and imports, the term that fits best is leaks.