2.4 Flashcards
1
Q
withdrawal/ leakage summary (4)
A
leaves circular flow, reducing economy size
Savings
Taxation
iMports
2
Q
injections summary (4)
A
enters circular flow, increases economy size
Investment
Government spending
eXports
3
Q
circular flow of income
A
economic model which shows flow of goods/ sevices and payments
households spend on goods and services and work
firms pay wages and supply goods and services
4
Q
multiplier formula
A
1/ 1- MPC
5
Q
multiplier definition
A
for an initial injection the final economic impact will be more than proportionate
6
Q
multiplier shifts
A
AD, depends on if +ve or -ve
