These are used to show the essential characteristics of complicated economic conditions in order to analyse them and predict the result of changes of variables
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Recession
When an economy is growing at less than its long-term trend rate of growth
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Balance of Payments
Exports minues imports - a deficit means more is imported than exported
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Flow
Measures over a specified period of time
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Stock
A quantity measured at a particular point in time
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Injections
money that originates outside the circular flow and so will increase national income/output/expenditure
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Withdrawals
any money not passed on in the circular flow and has the effect of reduciing national income/output/expenditure
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Investment
spending by firms on buildings, machinery and improving the skills of the labour force
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savings
a withdrawal from the circular flow
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Income Induced
will increase as income increases and decrease as income decreases
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Multiplier Effect
where an increase or decrease in spending leads to a larger than proportionate change in the national income
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Net government spending
the difference between government spending and taxation
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Fiscal Policy
the policy of the government regarding taxation and government expenditure
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Disposable income
income available to households after the payment of income tax and national insurance contribution
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Other cards in this set
Card 2
Front
When an economy is growing at less than its long-term trend rate of growth
Back
Recession
Card 3
Front
Exports minues imports - a deficit means more is imported than exported
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