Which term describes the point when total injections equal total leakages?

Equilibrium is the term for the point where total injections equal total leakages. In the circular flow model, leakages (S + T + M) pull spending out of the domestic flow of income, while injections (I + G + X) add outside spending back in. When the two sides balance, planned spending on domestic output equals the income that output generates, so real GDP has no built-in pressure to rise or fall.

When injections exceed leakages, planned spending on goods and services is running ahead of what firms are producing. Inventories fall below the level firms wanted to hold, so firms respond by hiring more workers and raising output. Real GDP and income rise, which pulls leakages up too, since higher income means more saving, more tax revenue, and more imports, until the extra leakages catch up to injections and a new, higher equilibrium is reached.

The reverse happens when leakages exceed injections. Households and the rest of the economy are pulling more out of the spending stream than investment, government purchases, and exports are putting back in, so planned spending falls short of current output. Unsold goods pile up as inventories, firms cut production and lay off workers, and real GDP and income fall until lower income drags leakages back down to match the smaller flow of injections.

This is the same logic behind the spending multiplier: a gap between injections and leakages does not change GDP dollar for dollar. Each round of new income gets partly re-spent and partly leaked into saving, taxes, and imports, so the total change in real GDP equals the injection-leakage gap multiplied by a multiplier. When saving is the only leakage that responds to income, that multiplier is 1 divided by the marginal propensity to save. In the fuller open-economy version of the model, where taxes and imports also rise and fall with income, that multiplier shrinks to 1 divided by the sum of the marginal propensities to save, tax, and import, because more of each new dollar of income leaks out before it can be re-spent.

A worked example: suppose investment is 200 billion dollars, government spending is 300 billion, and exports are 100 billion, for total injections of 600 billion. Saving is 150 billion, taxes are 250 billion, and imports are 100 billion, for total leakages of 500 billion. Injections exceed leakages by 100 billion. To keep this illustration simple, assume taxes and imports are fixed amounts that do not change as income changes, so saving is the only leakage that responds to income here; with a marginal propensity to consume of 0.8, the simple multiplier is 1 divided by (1 minus 0.8), which equals 5. Real GDP rises by the 100 billion gap times the multiplier of 5, or 500 billion, before the economy settles into its new equilibrium.