These are any means by which income is leaked from the circular flow of income.
What are withdrawals?
100
At different price levels this is given by:
C + I + G + X - M
What is aggregate demand?
100
This refers to all tools available to government to influence the level of aggregate demand in the economy and comprises of both fiscal policy and monetary policy.
What is demand management policy?
100
This applies in the situation where one country can produce more of a good compared to another country even though it uses the same resources.
What is absolute advantage?
100
In this system, the exchange is set by the government and maintained at one level.
What is the fixed exchange rate?
200
This is the total value of all final goods and services produced in an economy over a certain period of time.
What is gross domestic product?
200
This is the level of consumption when income is zero?
What is autonomous consumption?
200
This refers to government's intervention in the economy through its spending and taxation
What is fiscal policy?
200
This refers to integration of economics across the globe.
What is globalization?
200
The situation where the outflows in the current account are greater than the inflows.
What is a current account deficit?
300
This principle state that national income increases by a greater amount relative to the increase in injections which brought it about.
What is the multiplier principle?
300
This is the proportion of any change in income which is devoted to consumption.
What is the marginal propensity to consume?
300
This is the tool of monetary policy which involves the purchase or sale of government securities by the Central Bank.
What is open market operations?
300
This is given by the export price index divided by the import price index.
What is the terms of trade?
300
This is a decrease in the external value of a country's currency under a fixed exchange rate.
What is a devaluation?
400
These are additional forms of expenditure in the economy apart from consumers' spending.
What are injections?
400
This applies in cases where an individual's expenditure is greater than his or her income.
What is dissaving?
400
This is the total level of debt accumulated by government which has not yet been repaid.
What is public debt?
400
An agreement among a group of nations to enforce free trade throughout the membership of countries.
What is a free trade area?
400
This is difference between the import and export of goods in the balance of payments.
What is the merchandise trade balance?
500
At different levels of income this is given by:
C + I + G + X - M
What is aggregate expenditure?
500
Expenditure which results in an increase in the stock of capital.
What is investment?
500
This is the regulation of the economy through a change in the interest rate.
What is monetary policy?
500
This occur when one country can produce a good at lower opportunity cost when compared to another country
What is comparative advantage?
500
This is an increase in the external value of a country's currency under a floating exchange rate.