The Circular Flow Model, National Account Aggregates, and the Multiplier (Grade 12 NSC Matric Economics): Flashcards

Economy with trade and interactions with other countries

Households, businesses, government, foreign

$L = S + T + M$

$J = I + G + X$

Leakages equal injections ($L = J$)

Physical movement of goods, services, and factors of production

Monetary payments for real flows

$Y = C + I + G + (X - M)$

National income increases, economic growth

National income decreases, economic contraction