4.4 EQUILIBRIUM IN THE CIRCULAR FLOW MODEL Flows out of the circular flow Flows into the circular flow (withdraw) (injection saving by households borrowing by households saving by firms borrowing by firms taxes paid by household to transfers paid by governments government to households taxes paid by firms to transfers paid by governments government to firms imports of factors of government purchases of production factors of production ° imports of goods and government purchases of services goods and services exports of factors of production exports of goods and services4.4 EQUILIBRIUM IN THE CIRCULAR FLOW MODEL ➢ Flows out of the circular flow (withdraw) ⚫ saving by households ⚫ saving by firms ⚫ taxes paid by household to government ⚫ taxes paid by firms to government ⚫ imports of factors of production ⚫ imports of goods and services ➢ Flows into the circular flow (injection) ⚫ borrowing by households ⚫ borrowing by firms ⚫ transfers paid by governments to households ⚫ transfers paid by governments to firms ⚫ government purchases of factors of production ⚫ government purchases of goods and services ⚫ exports of factors of production ⚫ exports of goods and services