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...
