The Circular Flow of Income is an open model of the Australian economy that represents the flow of money between the five sectors. In an economy, the equilibrium state is reached when the total losses equals the total injections. Changes in spending and production can lead to the restoration of equilibrium income in the economy, where losses are equal to injections and the circular flow of income undergoes no change in size. The equilibrium level of income refers to the level of income, production, and employment at which aggregate demand and aggregate supply in an economy are equal. Market equilibrium occurs when the quantity demanded equals the quantity supplied, the market stabilizes, and there is no trend in change. Referring to the five-sector circular flow model of income, market equilibrium is achieved when injections are identical to losses, i.e.: S + T + M = I + G + X. In an economy, it is always possible reach balance, no it doesn't matter how much difference there is between the losses, i.e. the money taken out of the flow, and the injections,...