Explain Using Diagrams the Relationship Between Leakages and Injections
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Explain using diagrams the relationship between leakages, Injections and the circular flow of income
AD = C+I+G-(X+M)
This diagram shows the circular flow of income circular flow of income is The movement of spending and income throughout the economy, when money is entered into the circular flow of income (For example Exports) it is called an injection as money is coming into the world economy. However Money leaving the country is called a leakage, an example of this is an Export
This diagram shows the circular flow of income circular flow of income is The movement of spending and income throughout the economy, when money is entered into the circular flow of income (For example Exports) it is called an injection as money is coming into the world economy. However Money leaving the country is called a leakage, an example of this is an Export
Injections
Investment
The graph shows how an injection into the economy influences GDP, As you can see from the graph the injection in Investment has increased GDP, this is because an increased in investment (for example increase in investment in technology) would help them produce better quality products or produce products more cheaply, they would expect to make a profit from this as the company would anticipate higher demand due to the product being better quality as well as the unit cost falling so the product could be supplied cheaper. Because of the increase in technology more workers may be needed to man new machinery
The graph shows how an injection into the economy influences GDP, As you can see from the graph the injection in Investment has increased GDP, this is because an increased in investment (for example increase in investment in technology) would help them produce better quality products or produce products more cheaply, they would expect to make a profit from this as the company would anticipate higher demand due to the product being better quality as well as the unit cost falling so the product...
AD = C+I+G-(X+M)
This diagram shows the circular flow of income circular flow of income is The movement of spending and income throughout the economy, when money is entered into the circular flow of income (For example Exports) it is called an injection as money is coming into the world economy. However Money leaving the country is called a leakage, an example of this is an Export
This diagram shows the circular flow of income circular flow of income is The movement of spending and income throughout the economy, when money is entered into the circular flow of income (For example Exports) it is called an injection as money is coming into the world economy. However Money leaving the country is called a leakage, an example of this is an Export
Injections
Investment
The graph shows how an injection into the economy influences GDP, As you can see from the graph the injection in Investment has increased GDP, this is because an increased in investment (for example increase in investment in technology) would help them produce better quality products or produce products more cheaply, they would expect to make a profit from this as the company would anticipate higher demand due to the product being better quality as well as the unit cost falling so the product could be supplied cheaper. Because of the increase in technology more workers may be needed to man new machinery
The graph shows how an injection into the economy influences GDP, As you can see from the graph the injection in Investment has increased GDP, this is because an increased in investment (for example increase in investment in technology) would help them produce better quality products or produce products more cheaply, they would expect to make a profit from this as the company would anticipate higher demand due to the product being better quality as well as the unit cost falling so the product...