The circular flow model of economics shows how money moves through an economy in a constant loop from producers to consumers and back again, factoring into a nation’s GDP.

Leakage is an economic term that describes capital or income that escapes an economy or system in the context of a circular flow of income model. It results in a gap between supply and demand.

Download CBSE Class 12 Economics Syllabus 2022-2023 in PDF here. ... Circular flow of income (two sector model); Methods of calculating National Income - Value Added or Product method, ...