Give Two examples of leakages?

1. Savings: When individuals or households save a portion of their income instead of spending it, it is considered a leakage from the circular flow of income. This money is not being used to purchase goods and services, which can lead to a decrease in overall economic activity.

2. Taxes: When the government collects taxes from individuals and businesses, it is considered a leakage from the circular flow of income. This money is not being spent on goods and services in the economy, which can also lead to a decrease in overall economic activity.

1. Savings: When households save money, they are not spending it on goods and services, which reduces the total spending in the economy.
2. Taxes: When individuals and businesses pay taxes, the government takes that money out of the circular flow of income, which also reduces the total spending in the economy.