2. National Income (Circular Flow of Income) Flashcards

1
Q

Why do we measure the NATIONAL INCOME (NI)?

A
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2
Q

Explain the CIRCULAR FLOW of INCOME?

Also called “NATIONAL INCOME EQUILIBRIUM”

A
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3
Q

Explain, using a circular flow of income diagram, what is meant by a MULTIPLIER EFFECT?

A
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4
Q

What is the MULTIPLIER EFFECT?

A
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5
Q

Describe what is meant by a ‘NEGATIVE MULTIPLIER EFFECT’

A
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6
Q

Explain why ‘Investing More in Infrastructure Projects’ may result in an even greater increase in National Income

A
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