Based on the circular flow model, explain what the government would do if it believed that economic activity was too high
Increase taxation
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5
leakages or injections: Investment
Injection
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25
What is the budget and economic outcome of a country is C=200 I=400 G=300 X=500 S=100 T=200 M=250
Govt Deficit and expansion in the economy
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15
What is the group applied to the private sector to create a public sector circular flow/ domestic economy
The government sector
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15
What are 3 things that determine if someone will spend or save?
Income levels and future expectations, Cultural factors, Economic Confidence and future expectation, Life stage and age distribution, credit OR Govt policies
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15
What are the sectors within the private circular flow model
Individuals/households, Firms/businesses and financial institutions
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How do we calculate MPC
Change in C/Change in Y
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25
Apart from receipts for exports, identify what other money flows into Australia would also be regarded as injections.
Financial flows into the economy/ foreign investment
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15
MPS + MPC =?
1
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15
What are the four main factors of Production
natural resources or land, labour, capital, enterprise or entrepreneurial
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20
What is the business cycle
A graphical interpretation of recurring fluctuations in the level of economic activity over time
