Circular flow of income
What Circular flow of income means in Economics A-Level, as defined for AQA.
Definitions of Circular flow of income
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Reference: AQA
The continuous movement of spending and income between economic agents, with households providing factors of production to firms and receiving income in return.
The flow in which expenditure by one economic agent becomes the income of another, with income entering through injections and leaving through leakages.
A model in which the total value of economic activity can be calculated as total national output, total national expenditure, or total national income.
The model in which saving is a withdrawal and investment is an injection.
Topics that use Circular flow of income
- Aggregate demand and the level of economic activity (AQA A-Level)
- The circular flow of income (AQA A-Level)
- The determinants of aggregate demand (AQA A-Level)
Related terms
- Aggregate demand
- Inflation
- Circular flow
- Economic growth
- Economic welfare
- Exchange rates
- Full employment income
- Injections
Using Circular flow of income in the exam
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