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Economics 2.4.2

Economics- Edexcel 2.4.2

TermDefinition
open economy injections of extra demand into the circular flow investment spending on new capital goods/exports of goods and services/government spending on public services
open economy leakages of extra demand into the circular flow savings/imports of goods and services/taxation
I investment spending on new capital goods
X exports of goods and services
G government spending on public services
S savings
M imports of goods and services
T taxation
equilibrium of circular flow of income when injections = leakages
when does the level of national income rise? if I+G+X > S+M+T
when does the level of national income contract? if I+G+X < S+M+T
Created by: jessharris
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