Circular Flow of Income (AQA A-Level Economics): Flashcards

Flow of new output produced by economy in a time period

National income = National output = National expenditure

Real adjusts for prices; nominal includes inflation effects

Saving (S), Taxation (T), Imports (M)

Investment (I), Government spending (G), Exports (X)

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

Level where withdrawals equal injections

Withdrawals exceed injections

Economy engaging in international trade

Firms' planned spending on capital goods