Macroeconomic Circular Flow Model - Mathematical

Question 0

National Output

Answer 0

Refers to the value of all the commodities produced in an economy within a calendar year

Question 1

National Income

Answer 1

Refers to the claims in the form of income over the value of national output

Question 2

National Income Formula

Answer 2

C + S + T

Question 3

National Output Formula

Answer 3

C + G + I + X - IM

Question 4

National Income = National Output

Answer 4

C + S + T = C + I + G + X - IM

S + T = I + G + X - IM

S + T + IM = I + G + X

Question 5

Injections

Answer 5

[ I + G + X ]

Is an addition of potential spending into the macroeconomic circular flow model through investments, government purchases, and exports.

Question 6

Leakages

Answer 6

[ S + T + IM ]

Is a withdraw of potential spending from the macroeconomic circular flow model through savings, taxes and imports.