Circular flow of income Flashcards
1
Q
Barter is only efficient when what?
A
There is a few individuals in an economy
2
Q
What is money?
A
A medium of exchange and store of value, it is vital to enable the trillions of transactions which take place every day
3
Q
What are goods exchanged for ?
A
Money/ income
4
Q
What is an injection into an economy
A
When money comes into our economy from outside of our circular flow of income model
5
Q
Give examples of withdrawals
A
Imports,Household savings and taxes
6
Q
Can the financial system add withdrawals and injections?
A
Yes, When people save money, or people invest using money from the bank or borrow money from a bank
