8. Equilibrium can also be viewed from the standpoin t of injections into, and leakages from, the income stream . Investment and government spending arc injecti,ons into the income-expenditure stream . They add to aggregate demand. Saving and taxes are withdrawals from the income-expenditure stream. They diminish aggregate demand.

I n equilibrium, planned injections m ust equal planned leakages. I f leakages are greater than injections, total output is greater than aggregate demand. Income will decline. In contrast, if injections are greater than withdrawals, aggregate demand exceeds output causing income to rise.