National Income Flashcards
(4 cards)
1
Q
What is the circular flow of income?
A
Households - own all wealth and resources so provide firms with land,labour,capital in return for rent wages interest and profits. Money is used to buy goods/services from firms.
Money flows in one direction and goods/services/fop flow in another
2
Q
What are the injections?
(monetary additions to economy)
A
Investments
Savings
Exports
3
Q
What are the withdrawals?
(where money is removed from economy)
A
Taxation
Spending
Imports
4
Q
What is injections is greater than withdrawals?
A
Economy will be growing
Vice versa
