Injections & Withdrawals Money can enter or leave the circular flow of income in an economy Injections add money into the circular flow of income and increase its size Increased government spen...
The Circular Flow of Income The circular flow of income is an economic model that illustrates money flows in an economy There is a simple model which shows the money flows between households and fi...
Keynesian Versus Classical Long-run AS Long run aggregate supply (LRAS) is influenced by a change in the productive capacity of the economy Productive capacity is changed by changes to the quantity...
Factors Influencing Short-run AS There are multiple factors that can influence the short-run aggregate supply (SRAS). These include: Changes in costs of raw materials and energy Changes in exchange...
The Aggregate Supply (AS) Curve Aggregate supply is the total supply of goods/services produced within an economy at a specific price level at a given time A diagram showing the upward sloping shor...
Influences on the Net Trade Balance The net trade balance is the difference between the value of the exports and imports (X-M) The net trade balance is influenced by changes to real income, exchang...
Influences on Government Expenditure Government expenditure is influenced by the trade/business cycle and spending linked to achieving policy aims Government expenditure can happen on a local level...
Gross & Net Investment Investment is the total spending on capital goods by firms Investment helps to increase the capacity (production possibilities) of an economy Increased capacity = increas...
The Influence of Disposable Income On Consumption Disposable income is the money that households have left from their salary/wages after they have paid their taxes and have received any tran...
The Components of AD Aggregate demand (AD) is the total demand for all goods/services in an economy at any given average price level Its value is often calculated using the expenditure approach AD ...
Components of the Balance of Payments The Balance of Payments (BoP) for a country is a record of all the financial transactions that occur between it and the rest of the world The BoP has two main ...
Measures of Unemployment Someone is considered to be unemployed if they are not working but actively seeking work They are part of the labour force A country's population is divided into the...
