Explain why the economy will contract when leakages from the circular flow of economic activity are greater than the injections into the flow of economic activity

The principle of continuous flow shows how cash goes across the economy. Capital is removed or released in different ways even like capital is pumped into the system. Government-imposed taxation lessens the stream of income. Another loophole is money paid to international businesses for supplies. Savings from firms that might have rather placed to usage are a reduction in the constant distribution of profits from an economy. The country measures the total income by measuring all of those contributions into and deductions from circular income flow.