C28,C29,C30 ,Equillibrium and National Output,National Income,The multiplier Flashcards
What is the multiplier?
When an injection is made into the circular flow, the actual change in national income is greater than the initial injection
What is the circular flow of income?
National output = National income = National Expendicutres
What causes the multiplier effect?
Spending by firms, governments or from exports —-> more jobs —-> more money for consumers —-> more spending —–> more revenue —–> more jobs.t
What is national output?
The total goods and services that firms in an economy produce.
What is national expenditure?
The money spent by the households on goods and services that ends up going to firms.
What is national income?
The money paid to the households and labourers by firms.
What is a physical flow?
Real things (goods, services, land, and labour ) that flows in the circular flow of income.
What is a monetary flow?
The flow of money that pays for physical things.
What are injections into the circular flow ?
Investment, exports and government spending.
What are withdrawals from the circular flow of income?
Imports, saving, taxes
What is wealth?
The total value of assets owned by the individual economic unit
What is income?
A flow of money to the individual economic unit.
