Circular flow Flashcards
(6 cards)
1
Q
what are the 4 key parts of the circular flow of income
A
-households
-businesses
-government
-external sector, X/M
2
Q
what are the 3 injections within the circular flow
A
-investment
-exports of goods & services
-government spending
3
Q
what are the 3 leakages within the circular flow
A
-savings
-imports of goods & services
-taxation
4
Q
what is meant by income
A
a flow of income, e.g wages, dividends and profits
5
Q
what is wealth
A
wealth is a stock concept, e.g savings, shares, property, inheritance and jewels
6
Q
What is the circular flow of income
A
An economic model that illustrates how money moves in out and around the economy between firms, households the govt and external sector.
