2.4 - AO1 Flashcards
1
Q
The Multiplier
A
Process by which any changes in the components of AD will lead to an even greater change in national output
2
Q
Formula for the multiplier
A
1 / 1-MPC or 1/MPW (MPM-MPT+MPS)
3
Q
Accelerator
A
Changes in investment can be directly linked to changes in the rate of GDP growth
4
Q
Circular flow of income
A
An economic model which shows the money flow in an economy
