National Income Flashcards
1
Q
National income
A
Measures the monetary value of the flow of output of goods & services produced in an economy over a period of time
2
Q
Leakages
A
An exit from the circular flow of money- saving, tax & imports
3
Q
Injections
A
An input into the circular flow of money- investment, G and exports
4
Q
Withdrawals
A
Leakages out of the circular flow of income
5
Q
Circular flow of income
A
Circular flow of income shows connections between different sectors of our economic system- revolves around flows of goods & services & factors of production between firms and households
6
Q
The multiplier
A
Shows the amount by which a change in an injection or leakage causes total spending t change
7
Q
Value of the multiplier (calculation)
A
Multiplier=1/1-mpc = 1/mpw
