click below
click below
Normal Size Small Size show me how
Economics 2.4.2
Economics- Edexcel 2.4.2
Term | Definition |
---|---|
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 |