national income definitions

Question 1

circular flow of incomes

Answer 1

model that shows flow of goods and services in an economy

Question 2

withdrawals

Answer 2

income taken out of circular flow

Question 3

injections

Answer 3

income can be put into the circular flow

Question 4

macro-economic equilibrium

Answer 4

when aggregate demand equals aggregate supply

Question 5

multiplier effect

Answer 5

process of increase in a component of AD leads to increase that I greater for role of AD

Question 6

multiplier

Answer 6

figure used to multiply a change in an injection into the circular flow such as investment to find final change in income

Question 7

national income

Answer 7

value of the output, expenditure or income of an economy over a period of time

Question 8

closed economy

Answer 8

economy where there’s no foreign trade

Question 9

marginal propensity to import - MPM

Answer 9

increase in imports divided by increase in income

Question 10

marginal propensity to save - MPS

Answer 10

increase in saving divided by increase in income

Question 11

marginal propensity to tax

Answer 11

increase in tax revenues divided by increase in income

Question 12

marginal propensity to withdraw - MPW

Answer 12

increase in withdrawals from circular flow divided by increase in income

= SAME AS MPS+MPT+MPM