Unit 1 mind map

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  • Macroeconomics
    • 4 main economic objectives
      • Low unemployment
        • Government aims to minimise number of unemployed people
      • Price stability
        • Low stable rate of inflation. Inflation target is 2% (measured by CPI)
      • Balance of payments
        • Record of flow of money in and out of economy
      • Economic growth
        • Increase in productive capacity of economy. (Measured by increase in real GDP)
    • 2 other objectives: income distribution and the environment
    • Circular flow of income
      • Injections: addition to circular flow and increase in national income
      • Leakages: reduction from circular flow and decrease in national income
      • Injections > Leakages = EXPANSION
      • Injections < Leakages = CONTRACTION

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