Circular Flow of Income Flashcards
1
Q
What is the circular flow of income
A
is a model of the economy which shows the movement of goods and services between households and firms, and their corresponding payments in money terms
2
Q
What are the potential injections into an economy
A
- Investment
- Government spending
- Exports
3
Q
What are the potential withdrawals out of an economy
A
- Savings
- Tax
- Imports
4
Q
what would firms give to households
A
- Income
- Output of goods and services
5
Q
what would households give to firms
A
- factors of production (labour)
- expenditure/consumption
