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INJECTION-LEAKAGE MODEL: A model used in Keynesian economics based on the equality of non-consumption expenditures (or injections) and non-consumption uses of income (leakages). On one side of the equality is saving, taxes, and imports -- the non-consumption leakages. On the other side of the equality is investment, government purchases, and exports -- the non-consumption injections. The injection-leakage model provides an alternative to the Keynesian cross for identifying equilibrium aggregate output.

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Lesson 5: Market Demand | Unit 4: Determinants Page: 15 of 20

Topic: Shifters: Decrease <=PAGE BACK | PAGE NEXT=>

Demand determinants shift the demand curve.
  • The demand curve is drawn assuming that only price and quantity change. The determinants are assumed to be constant.
  • A change in one of the determinants can cause:
  • A decrease in demand, a leftward shift, which means that for any price, for every price, buyers are willing and able to buy less of the good.

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DEMAND AND SUPPLY DECREASE

A simultaneous decrease in the willingness and ability of buyers to purchase a good at the existing price, illustrated by a leftward shift of the demand curve, and a decrease in the willingness and ability of sellers to sell a good at the existing price, illustrated by a leftward shift of the supply curve. When combined, both shifts result in a decrease in equilibrium quantity and an indeterminant change in equilibrium price.

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