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9 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What is an Injection |
They are additions to the circular flow & Imcrease AD |
Examples are exports,investments & government spending |
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What is a Leakage |
Are reductions to the circular flow & decrease AD |
Examples are Imports,Savings and taxation |
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Define Aggregate Demand |
Is the total of all planned expenditures in the economy |
It’s the total of something |
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Give the formula for aggregate Demand |
Consumption + Investment + Government Spending + ( Exports - Imports ) |
C + I + G + ( X - M ) |
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What is Consumption |
Consumption refers to the total spending of UK households on goods & services for their own private use. |
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Finish the sentence : AD will increase and shift out to the right if ... |
Consumption increases |
C + |
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What may cause an increase in consumption ? List 3 |
Interest rates are cut Income tax is cut Incomes rise Consumer confidence rises Unemployment falls making consumers feel secure |
Interest rates Income consumer confidence |
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Define Investment |
Is the spending on capital goods by business and creates future production capacity. |
Spending on _________ goods by _________ |
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What may cause an increase in investment |
Consumer demand increases Interest rates are cut Business feel more confident about future consumer demand |
Consumer demand Interest rates are Business feel |
