2. National Income (Circular Flow of Income) Flashcards
1
Q
Why do we measure the NATIONAL INCOME (NI)?
A
2
Q
Explain the CIRCULAR FLOW of INCOME?
Also called “NATIONAL INCOME EQUILIBRIUM”
A
3
Q
Explain, using a circular flow of income diagram, what is meant by a MULTIPLIER EFFECT?
A
4
Q
What is the MULTIPLIER EFFECT?
A
5
Q
Describe what is meant by a ‘NEGATIVE MULTIPLIER EFFECT’
A
6
Q
Explain why ‘Investing More in Infrastructure Projects’ may result in an even greater increase in National Income
A
