Circular Flow Of Income Flashcards
1
Q
Households to Government
A
Tax (Income & VAT)
2
Q
Government to Households
A
Transfer Payments
3
Q
Firms to Government
A
Tax (Corporation)
4
Q
Government to Firms
A
Subsidies, Grants
5
Q
Households to Firms
A
Labour and Expenditure
6
Q
Firms to Households
A
Wages, Goods & Services
7
Q
Household Leakage
A
Saving & Spending on Imports
8
Q
Household Injection
A
Ask Mina
9
Q
Firms Leakage
A
Offshoring (tenuous)
10
Q
Firms Injection
A
Exporting and Consumer Dissaving
11
Q
The Multiplier Effect
A
For every pound injected, the total impact on the circular flow of income is greater than the nominal £ injected because it will cycle being respent
