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Circular flow of income
A model of the economy which shows the flow of goods, services and factors and their payments around the economy.
Closed economy
An economy where there is no foreign trade.
Income
Rent, interest, wages and profits earned from wealth owned by economic actors.
Injections
In the circular flow of income, spending which is not generated by households, including investment, government spending and exports.
National income
The value of the output, expenditure or income of an economy over a period of time.
Open economy
An economy where there is trade with other countries.
Wealth
A stock of assets which can be used to generate a flow of production or income. For example, physical wealth such as factories and machines is used to make goods and services.
Withdrawals or leakages
In the circular flow of income, spending by households which does not flow back into domestic firms, including savings, taxes and imports.
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