Economic Objectives and circular flow Flashcards
1
Q
Define the circular flow of income?
A
The movement of spending and income through an economy
2
Q
What are the three withdrawals from the circular flow of economics?
A
- Savings
- Imports
- Taxes
3
Q
What are the three Injections to the circular flow of economics?
A
- Investment
- Exports
- Government spending
4
Q
What is the formula for an economy to work at its best?
A
S+T+M=I+G+X
5
Q
What are the 5 government economic objectives?
A
- Stable and Sustainable ECONOMIC GROWTH
- Low and Stable INFLATION
- full employment
- Balance of Payments Equilibrium (X=M)
- An equitable distribution of income
