Withdrawals from the Circular Flow of Incomes

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Withdrawals from the Circular Flow of Incomes

Any structure that takes money out of the circular flow of incomes, which is a simple model for the flow of money. Under the model, consumers buy goods and services from producers, who make a profit. The producers then use that money to pay consumers to make their products (say, in factories). The consumers use that money to buy more goods and services and the cycle continues. Withdrawals from the circular flow include imports (in which money is sent outside the economy), savings (in which money is not spent at all) and taxes.