chapter 18 - flow of income

Question 1

what is consumption affected by ( 5 )

Answer 1

1. consumer confidence
2. wage levels
3. interest rates
4. levels of personal taxation
5. employment levels - disposable and discretionary income

Question 2

what is investment affected by? ( 4 )

Answer 2

1. business confidence
2. economic growth
3. capital utilisation
4. interest rates / access to finance

Question 3

what is government spending affected by? ( 3 )

Answer 3

1. priorities
2. macroeconomic objectives
3. debts and deficits

Question 4

what are imports and exports affected by? ( 4 )

Answer 4

1. exchange rates
2. International competitiveness
3. protectionism
4. barriers to trade

Question 5

aggregate supply

Answer 5

total economic output - all supply added up

Question 6

to increase economic growth demand or supply or both need to be shifted right. this is known as …

Answer 6

1. demand side policy
2. supply side policy

Question 7

3 types of leakages

Answer 7

1. savings
2. tax
3. imports

Question 8

3 types of injections

Answer 8

1. investment
2. exports
3. government spending

Question 9

what do injections or leakages affect

Answer 9

1. banks
2. government
3. International trade

Question 10

what do leakages lead to

Answer 10

negative multipliers

Question 11

what do injections lead to

Answer 11

positive multipliers