Questions on national income equilibrium
- What is meant by national income equilibrium?
- What is meant in broad terms by ‘the
circular flow of income’? Draw your own sketch diagram for the circular flow.
- What is the role of ‘households’ in this
model?
- What is the role of ‘firms’ in this model?
- What are the conditions necessary for
equilibrium in this model?
- What are the three ways of measuring
national income and why are they equal?
- What is meant by the terms ‘injections’
and ‘withdrawals’?
- What are the three injections and
three withdrawals? In what way do they inject into or withdraw from the circular
flow?
