The Circular Flow Model

Red arrows on the diagram represent LEAKAGES from the circular flow.
Green arrows on the diagram represent INJECTIONS into the circular flow.
(These topics are discussed in a separate section in the Wiki)

y = w + i + r + (pi)
National income = wages + interest + rent + profit

GDP = C + I + G + (X - IM)
Gross Domestic Product = consumption spending + investment spending + government spending + net exports

S = Y - C
(Savings = Income - Consumption Spending)

Disposable Income = y - T
(Disposable Income = national income - taxes)

Net Taxes = Taxes - Transfer Payments

If the economy is not growing:
GDP = y (national income)
leakages = injections

Circular_Flow.png
Econ 101 Section C, Circular Flow Diagram, (Lecture, Red Deer College, Red Deer, AB, January 30, 2012)