The circular flow of income and macroeconomic objectives form the... Show more
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10
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Macro economics notes
461
•
31 Mar 2023
•
Understanding Economic Growth, Circular Flow, and Supply and Demand
H
Hadi Farhat
@hadifarhat_sppl
Page 2: The Circular Flow of Income
This page explains how the circular flow of income works and different methods of measuring national income, including real and nominal GDP calculations.
Definition: National income represents the total value of goods and services a country produces in one year.
Highlight: The circular flow model shows the continuous movement of money between households and firms through the exchange of goods, services, and factors of production.
Vocabulary: Gross National Product measures the market value of products produced using labor and property supplied by a country's citizens.
Page 3: Aggregate Demand and Economic Growth
This page introduces aggregate demand and supply analysis and defines key economic concepts including economic growth, inflation, and unemployment.
Definition: Aggregate demand represents the total demand in the economy, measuring spending by consumers, firms, government, and overseas entities.
Vocabulary: Economic growth is measured as the percentage increase in real GDP.
Example: If real GDP grows from 103 billion, the economic growth rate would be 3%.
Page 4: Components of Aggregate Demand
This page details the various components that make up aggregate demand and different types of inflation.
Definition: Net exports measure a nation's total trade balance .
Vocabulary: Cost-push inflation occurs due to rising production costs, while demand-pull inflation results from rapid growth in aggregate demand.
Example: AD = C + I + G + , where C is Consumer Spending, I is Investment, G is Government Spending, X is Exports, and M is Imports.
Page 5: Aggregate Demand and Supply Curves
This page provides graphical analysis of aggregate demand and supply relationships.
Definition: The AD curve shows the relationship between the general price level and the quantity of real GDP demanded.
Highlight: Short-run aggregate supply and long-run aggregate supply curves demonstrate different time horizons for economic adjustment.
Example: A rightward shift in the AD curve indicates an increase in aggregate demand at all price levels.
Page 6: Macroeconomic Equilibrium
This page explains how economic equilibrium is achieved through the balance of injections and withdrawals in the economy.
Definition: Macroeconomic equilibrium occurs when the rate of withdrawals equals the rate of injections in the economy.
Vocabulary: Injections are variables that add to the circular flow of income, while withdrawals are variables that leak out.
Example: Government spending is an injection, while taxation represents a withdrawal from the circular flow of income.
Page 6: Macroeconomic Equilibrium
This section explains how economic equilibrium is achieved through the balance of various economic forces.
Definition: Macroeconomic equilibrium occurs when withdrawals equal injections in the economy.
Example: Government spending, investment, and exports are examples of injections into the circular flow.
Vocabulary: Withdrawals include taxation, imports, and savings that leak from the circular flow.
Page 7: Determinants of Aggregate Demand
The page focuses on factors affecting aggregate demand and their economic implications.
Definition: AD = C + I + G + represents the components of aggregate demand.
Highlight: Consumer spending is influenced by factors including interest rates and consumer confidence.
Example: A rightward shift in AS indicates increasing economic output capacity.
Page 1: Macroeconomic Objectives and Measurements
This page introduces the fundamental macroeconomic objectives and their measurement methods. The four main objectives of macroeconomic policy are outlined alongside their respective measurement tools.
Definition: Real GDP measures the quantity of goods and services produced in an economy, adjusted for inflation.
Highlight: The four main macroeconomic objectives are economic growth, minimizing unemployment, price stability, and maintaining a stable balance of payments.
Vocabulary: CPI measures household purchasing power, while the Claimant Count tracks unemployment benefit claims.
Example: Balance of payments tracks international transactions - when a country exports cars worth 800,000, the balance would be +$200,000.
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The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user
Understanding Economic Growth, Circular Flow, and Supply and Demand
H
Hadi Farhat
@hadifarhat_sppl
The circular flow of income and macroeconomic objectives form the foundation of understanding how economies function. Economic growth objectives in macroeconomics focus on maintaining stability and growth through various interconnected factors.
Key points:
- Macroeconomic performance is measured through real GDP,... Show more
Page 2: The Circular Flow of Income
This page explains how the circular flow of income works and different methods of measuring national income, including real and nominal GDP calculations.
Definition: National income represents the total value of goods and services a country produces in one year.
Highlight: The circular flow model shows the continuous movement of money between households and firms through the exchange of goods, services, and factors of production.
Vocabulary: Gross National Product measures the market value of products produced using labor and property supplied by a country's citizens.
Sign up to see the contentIt's free!
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Page 3: Aggregate Demand and Economic Growth
This page introduces aggregate demand and supply analysis and defines key economic concepts including economic growth, inflation, and unemployment.
Definition: Aggregate demand represents the total demand in the economy, measuring spending by consumers, firms, government, and overseas entities.
Vocabulary: Economic growth is measured as the percentage increase in real GDP.
Example: If real GDP grows from 103 billion, the economic growth rate would be 3%.
Sign up to see the contentIt's free!
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Page 4: Components of Aggregate Demand
This page details the various components that make up aggregate demand and different types of inflation.
Definition: Net exports measure a nation's total trade balance .
Vocabulary: Cost-push inflation occurs due to rising production costs, while demand-pull inflation results from rapid growth in aggregate demand.
Example: AD = C + I + G + , where C is Consumer Spending, I is Investment, G is Government Spending, X is Exports, and M is Imports.
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Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Page 5: Aggregate Demand and Supply Curves
This page provides graphical analysis of aggregate demand and supply relationships.
Definition: The AD curve shows the relationship between the general price level and the quantity of real GDP demanded.
Highlight: Short-run aggregate supply and long-run aggregate supply curves demonstrate different time horizons for economic adjustment.
Example: A rightward shift in the AD curve indicates an increase in aggregate demand at all price levels.
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Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Page 6: Macroeconomic Equilibrium
This page explains how economic equilibrium is achieved through the balance of injections and withdrawals in the economy.
Definition: Macroeconomic equilibrium occurs when the rate of withdrawals equals the rate of injections in the economy.
Vocabulary: Injections are variables that add to the circular flow of income, while withdrawals are variables that leak out.
Example: Government spending is an injection, while taxation represents a withdrawal from the circular flow of income.
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Page 6: Macroeconomic Equilibrium
This section explains how economic equilibrium is achieved through the balance of various economic forces.
Definition: Macroeconomic equilibrium occurs when withdrawals equal injections in the economy.
Example: Government spending, investment, and exports are examples of injections into the circular flow.
Vocabulary: Withdrawals include taxation, imports, and savings that leak from the circular flow.
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Join milions of students
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Page 7: Determinants of Aggregate Demand
The page focuses on factors affecting aggregate demand and their economic implications.
Definition: AD = C + I + G + represents the components of aggregate demand.
Highlight: Consumer spending is influenced by factors including interest rates and consumer confidence.
Example: A rightward shift in AS indicates increasing economic output capacity.
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Improve your grades
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Page 1: Macroeconomic Objectives and Measurements
This page introduces the fundamental macroeconomic objectives and their measurement methods. The four main objectives of macroeconomic policy are outlined alongside their respective measurement tools.
Definition: Real GDP measures the quantity of goods and services produced in an economy, adjusted for inflation.
Highlight: The four main macroeconomic objectives are economic growth, minimizing unemployment, price stability, and maintaining a stable balance of payments.
Vocabulary: CPI measures household purchasing power, while the Claimant Count tracks unemployment benefit claims.
Example: Balance of payments tracks international transactions - when a country exports cars worth 800,000, the balance would be +$200,000.
We thought you’d never ask...
What is the Knowunity AI companion?
Our AI Companion is a student-focused AI tool that offers more than just answers. Built on millions of Knowunity resources, it provides relevant information, personalised study plans, quizzes, and content directly in the chat, adapting to your individual learning journey.
Where can I download the Knowunity app?
You can download the app from Google Play Store and Apple App Store.
Is Knowunity really free of charge?
That's right! Enjoy free access to study content, connect with fellow students, and get instant help – all at your fingertips.
Can't find what you're looking for? Explore other subjects.
Students love us — and so will you.
4.9/5
App Store
4.8/5
Google Play
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user