Circular Flow of Income Flashcards
1
Q
Why is the circular flow of income important
A
we can work out economic growth, and how the economy grow
2
Q
What are the factors of production?
A
Labour,capital, land,Investment
3
Q
What is the circular flow of income?
A
The movement of spending or income throughout the economy.
4
Q
What are factor incomes?
A
Saving (S) ,Taxation (T) , Import spending (M)
5
Q
STM Are known as?
A
Leakages
6
Q
How can expenditure take places for goods and services in the economy
A
investment, government, foreigners (exports)
7
Q
What is the term used to describe money that enters our economy outside consumer spending
A
Injections
8
Q
X > M
A
More money enters the economy, thus economic growth increases
9
Q
X < M
A
More money leaves the economy, thus economic growth decreases
10
Q
Injections = Leakages
A
Macroeconomic Equilibrium
11
Q
A
