Logged out
Access All our Essays in an Instant
Swap your work for FREE access, or pay £4.99 for instant access
Explain how an increase in autonomous government expenditure affects the economy.
Member rating: No Rating | Words: | Submitted: Thu Nov 13 2003
Page Preview
On the left is an image preview of every page of this document, and below are the first 150 words with formatting removed:
Explain how an increase in autonomous government expenditure affects the economy The circular flow of income and spending illustrates the linkages between different sectors of the macro-economy. OUTPUT The British economy comprises millions of individual economic units - households, firms and government. Together their decisions generate spending, output and income - three ways of measuring the total economic activity. The circular flow of income shows flows of goods and services and factors of production between firms and households. Households provide their labour for firms who produce goods and services. In return people in work receive payments, such as wages, which in turn are spent on the output of firms. Not all of current income is spent - some is saved. This represents a leakage from the circular flow. In addition to consumer spending, businesses also carry out capital investment spending (e.g. on new plant & machinery and buildings). Investment demand is...
Get instant access
- Instant, unlimited access to our documents in full
- Swap your work for free access, or pay £4.99
- To see the full version of this document and 147,038 others
Receive email updates for this category
- Simply tell us your email address and receive a weekly Study Help Email for FREE
- Receive 3 FREE essay views with each email
- Get all the latest essays from Coursework.Info & discussion from TheStudentRoom.co.uk
