Circular flow of income
These are supplied by households to firms in the circular flow.
What are the factors of production?
Short-run equilibrium output occurs where these two curves meet
What are AD and AS?
This value shows how an injection causes a larger overall change in national income.
What is the multiplier?
This is the reward firms give households for using land, labor, and capital.
What is income (wages, rent, interest, and profits)?
Classical economists draw the LRAS curve in this form.
What is vertical?
MPS, MPT, MPM, and MPW are all examples of these variables.
What are marginal propensities?
Investment, exports, and government spending each fall into this category of circular flow activity.
What are injections?
Keynesian economists argue that equilibrium can exist even when the economy is here.
What is below full employment?
When people spend more of each extra dollar, this happens to the multiplier.
What is it increases?
Saving, taxes, and imports are grouped together as these.
What are withdrawals/leakages?
Classical theory says this change in real wages helps eliminate unemployment.
What is a fall in real wages?
MPW is the marginal propensity to do this with income.
What is withdraw?
An economy that interacts with other countries through trade is known as this.
What is an open economy?
When short-run GDP is above or below the vertical LRAS level, classical economists call it this.
What is long-run disequilibrium?
With MPS = 0.20, MPT = 0.10, and MPM = 0.05, this is the resulting MPW.
What is 0.35?