MAIN TOPIC 1:
MACROECONOMICS CONCEPTS
DESCRIPTION
SUBTOPIC 1: CIRCULAR-FLOW NMODEL CONCEPT
1 Acontinuous flow of spending,
between different sectors production and income Circular flow model
2
An economy that trades with
3
the foreign sector Open economy
An economy that has no foreign
seclor as a participator
The sector that needs to be included Closed economy
for the economy to be Foreign sectorl
regarded as an open economy international
Primary participants and owners of the factors of
production Households /
6
Those financial institutions that are not directly involved Consumers
production of goods and services, e.g. banks, insurance in the
Financlal sector
7
Companies, pension funds and the JSE
Aplace or mechanism through which buyers and sellers meet Market
to do business
Market where factors of production are traded, e.g. labour Factor market input
market market
Amarket where goods and services are traded, e.g. cars, milk Goods market/
Product
10 The maket where both short- and long-termfinancial assets Financial market
are traded
11
The short-term and very short-temmarket for savings and oanMoney market
12 Long-tem funds are borrowed and saved by consumers and Capital market
business enterprises.
13 The flow of goods and services between the participants in the Real flow
circular fiow
14 The fow of income and expenditurà between the parlicipants Money ilow
in the circular low
15 Money withdrawn from the circular flow, e.g through savings Leakages
(S), taxes (D and iport expenditure (M) Injections
16 The inflow of additional money into the economy through
investment (), government (G), and payments for exports (X) Economic
17 The economy is in equilibrium if leakages are equal to equilibrium
injections:.
Marginal propensity to
18 The proportion of additional income that households choose to Consume
spend on goods and services
produces a proportionately Multiplier
19 Asmallinitial increase in spending
national income
larger increase in aggregate
that takes place even if the Autonomous
20 A minimum level of consumption
income. consumption
consumer has no disposable Savings
21 Income that is not consumed
MACROECONOMICS CONCEPTS
DESCRIPTION
SUBTOPIC 1: CIRCULAR-FLOW NMODEL CONCEPT
1 Acontinuous flow of spending,
between different sectors production and income Circular flow model
2
An economy that trades with
3
the foreign sector Open economy
An economy that has no foreign
seclor as a participator
The sector that needs to be included Closed economy
for the economy to be Foreign sectorl
regarded as an open economy international
Primary participants and owners of the factors of
production Households /
6
Those financial institutions that are not directly involved Consumers
production of goods and services, e.g. banks, insurance in the
Financlal sector
7
Companies, pension funds and the JSE
Aplace or mechanism through which buyers and sellers meet Market
to do business
Market where factors of production are traded, e.g. labour Factor market input
market market
Amarket where goods and services are traded, e.g. cars, milk Goods market/
Product
10 The maket where both short- and long-termfinancial assets Financial market
are traded
11
The short-term and very short-temmarket for savings and oanMoney market
12 Long-tem funds are borrowed and saved by consumers and Capital market
business enterprises.
13 The flow of goods and services between the participants in the Real flow
circular fiow
14 The fow of income and expenditurà between the parlicipants Money ilow
in the circular low
15 Money withdrawn from the circular flow, e.g through savings Leakages
(S), taxes (D and iport expenditure (M) Injections
16 The inflow of additional money into the economy through
investment (), government (G), and payments for exports (X) Economic
17 The economy is in equilibrium if leakages are equal to equilibrium
injections:.
Marginal propensity to
18 The proportion of additional income that households choose to Consume
spend on goods and services
produces a proportionately Multiplier
19 Asmallinitial increase in spending
national income
larger increase in aggregate
that takes place even if the Autonomous
20 A minimum level of consumption
income. consumption
consumer has no disposable Savings
21 Income that is not consumed
