Leakages, also referred to as withdrawals, represent flows of income that exit the circular flow of income in an economy, thereby decreasing the aggregate demand and overall spending within the domestic market.

The primary components of leakages include:

• Savings (S): Portions of income that households and firms opt not to spend on domestic consumption, instead channeling them into financial institutions for future use.
• Taxes (T): Compulsory levies imposed by the government on households and businesses, which reduce available disposable income and curb immediate spending power.
• Imports (M): Expenditures on goods and services originating from foreign countries, effectively transferring money outside the national economy and away from local producers.