Household savings flow to financial markets. Financial markets are banks and other financial institutions that are a link between savers and borrowers. Governments, firms and the rest of the world are also savers. Leakages and Injections Leakages are diversion of income from domestic spending. It is savings, taxes, and imports.
Injections are payments other than by firms or any spending other than by domestic households.
It includes investment, government purchases, transfer payments, and exports. How much a household spends depends on how much they have to spend. Disposable income is the income actually available for spending and saving. The relationship between consumption and income is relatively stable. As real income goes up, real consumption spending goes up.