Transfer payments are an injection into the circular flow of income and expenditure model.

Circular Flow

An economic model that illustrates the continuous movement of goods, services, and money between households and businesses.

Transfer Payments

Payments made by governments to individuals or groups without requiring any goods or services in return, such as welfare, social security, and subsidies.

Injections

Funds entering the economy through investment, government spending, and exports that can stimulate economic activity.