National Income

Question 1

Definition

Answer 1

Total value of output in an economy

Question 2

Circular flow of income

Answer 2

National output = National expenditure = National Income (or Total withdrawals = Total Injections)

Question 3

Injections

Answer 3

Positive flows into the circular flow:
1. Investment
2. Government spending
3. Exports

Question 4

Withdrawals/leakages

Answer 4

Out of the circular flow of income:
1. Savings
2. Taxes
3. Imports

Question 5

Injections/withdrawals and economic growth

Answer 5

Injections > withdrawals: increased economic growth
Injections < withdrawals :decreased economic growth
Injections = withdrawals: constant economic growth