An Overview of the Economy: The Circular Flow of Income (HSC SSCE Economics): Flashcards

Individuals, businesses, financial institutions, govt, intl trade

Labour, land, capital, enterprise

Money withdrawn from income flow, reducing economic activity

Savings, Taxation, iMports

Money added to income flow, increasing economic activity

Investment, Government expenditure, eXports

When total leakages equal total injections

$S + T + M = I + G + X$

Economy contracts: income, production, employment fall

Economy expands: income, production, employment rise