Transcript Slide 1

Activity
Show the monetary and
real flows through the
factor and goods markets
between households and
firms.
Activity
Activity
Show the leakages
and injection between
households and firms
and the flows through
the financial market.
Activity
Include the government
sector in this model
Activity
Show what would happen to the
flow of spending, production and
income if :
- Taxes increase
- Taxes decrease
- Government spending increases
- Government spending decreases
Include the foreign
sector in this model
Activity
What will happen
with the flows if
imports increase?
What will happen to
the flows if exports
increase?
Identify the leakages
and injections
Which of the following is part of real flows and which is part
of money (payment) flows?
Real
The incomes that households receive from
selling their factors of production to firms and
the government.
The supply of goods and services by firm to the
goods market
The spending by households on goods and
services
The payment for imports
Taxation
The provision of goods and services by
government
Money
Which of the following is part of real flows and which is part
of money (payment) flows?
Real
The incomes that households receive form
selling their factors of production to firms and
the government.
The supply of goods and services by firm to the
goods market
The spending by households on goods and
services
The payment for imports
Taxation
The provision of goods and services by
government
Money
Will the following factors increase or decrease the flow of
spending, income and production in the economy?
Increase
An increase in consumption spending by
households
An increase in households’ sale of factors of
production to firms
A decrease in the provision of goods and
services by government
A decrease in exports
An increase in exports
Decrease
Will the following factors increase or decrease the flow of
spending, income and production in the economy?
Increase
An increase in consumption spending by
households
An increase in households’ sale of factors of
production to firms
A decrease in the provision of goods and
services by government
A decrease in exports
An increase in exports
Decrease