AQA Economics A-level Macroeconomics: Circular Flow of Income

These flashcards cover key concepts related to national income, the circular flow of income, and economic indicators in A-level Macroeconomics.

National Income

The total value of the goods and services a country produces in one year.

Gross Domestic Product (GDP)

The value of all goods and services produced within a country's borders.

Gross National Product (GNP)

The market value of all products produced by the labor and property supplied by a nation's citizens.

Gross National Income (GNI)

The sum of value added by all producers in a nation plus product taxes minus subsidies, plus primary income receipts from abroad.

Real GDP

The value of GDP adjusted for inflation.

Nominal GDP

The value of GDP not adjusted for inflation; reflects current prices.

Circular Flow of Income

The economic model depicting how money flows between households and firms.

Injections

Money entering the economy through government spending, investment, and exports.

Withdrawals

Money leaving the economy through taxes, savings, and imports.

Equilibrium in Circular Flow

The state in which the rate of withdrawals equals the rate of injections.

Full Employment Income

The total output of an economy when unemployment is minimized, reflecting the government target.

Savings Rate

The proportion of income that households save rather than spend.

Investment

The purchase of goods that will be used to produce other goods and services.