The Nature of the Economy - Video Notes

A set of fill-in-the-blank flashcards covering key concepts from the lecture notes on the circular flow model, injections and leakages, sector roles, ASIC, taxation, and the business cycle.

In the circular flow model, money that is not being used in the flow and leaves the economy is called a __.

leakage

Money injected into the economy to grow business is a(n) __.

injection

The five sectors in the circular flow model are the household sector, the firms sector, the __ sector, the government sector, and the overseas sector.

financial

Consumption is the use of goods and services by the __.

household

The financial sector refers to banks that work between __ and borrowers in an economy.

savers

Households and firms are __ on each other.

interdependent

Exports are goods and services sold to the __.

overseas

Imports are goods and services bought from the __.

overseas

ASIC stands for __.

Australian Securities and Investments Commission

ASIC's main roles include monitoring the provision of financial services and providing consumer protection in areas such as __.

investment advice

The government sector is responsible for __ (taxation) and government expenditure (injection).

taxation

Exports (X) are an __ in the circular flow.

injection

Imports (M) are a __ in the circular flow.

leakage

When injections are greater than __, economic growth occurs.

leakages

If leakages exceed injections, the economy will __.

decline

The Business Cycle depicts the rise and fall in __ over time.

output

The four phases of the business cycle are expansion, peak (boom), __, and trough (recession).

contraction

During a boom, inflation may __.

occur

A recession is a period of falling __ and rising unemployment.

output

A severe prolonged downturn is called a __.

depression

Consumption (C) is the household's use of goods and services by the __.

household

Savings (S) are a __ in the circular flow.

leakage

The five sectors in the circular flow model are the household sector, the firms sector, the __ sector, the government sector, and the overseas sector.

financial

Investment (I) is an __ in the circular flow.

injection

Taxation (T) is a __ in the circular flow.

leakage

Government expenditure (G) is an __.

injection