Studied by 3 peopleImports
________ are a leakage (income that is spent and not returned to firms)
Investments
________ allow the amount of income circulating in the economy to rise.
Firms
________ have access to savings by borrowing money from banks.
Macroeconomics
________: larger scale economy which is concerned with the allocation of a nations resources.
Output method
________: actual value of the goods and services produced.
circular flow of income
It is the money that escapes an economy in a(n) ________.
Macroeconomics
larger scale economy which is concerned with the allocation of a nations resources
GDP
monetary value of all of the final goods and services produced in a year in a country
Leakages
a diversion of funds from a process
Real GDP
GDP which has been adjusted for inflation
Trough
when contraction comes to an end, aggregate demand will pick up and enter recovery phase
Negative output gap
economy producing below its trend and unemployment will is likely to be an issue
Output method
actual value of the goods and services produced
Income method
measures the value of all the incomes earned in the economy
Expenditure method
measures the value of all spending on goods and services in the economy
GDP
monetary value of all of the final goods and services produced in a year in a country
Leakages
a diversion of funds from a process. It is the money that escapes an economy in a circular flow of income
Injections
introduction of income into the flow
The business cycle
its fluctuations in economic activity are measured by changes in real GDP
Recovery
Economic expansion driven by aggregate demand as households + consumers spend more
Boom
Increased demand for goods and services pushes up average price (inflation)
Recession
Two consecutive quarters of negative GDP growth
Trough
when contraction comes to an end, aggregate demand will pick up and enter recovery phase
Positive output gap
economy producing above its trend and inflation is likely to be an issue
Note 
Flashcard (38)