2.3.4 - National income

The circular flow of income.

Use a - circular flow of income to connect the rule to the data and decision in the question.

This matters because a - circular flow of income determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - circular flow of income to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - circular flow of income is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between income and wealth.

Use b - distinction between income and wealth to connect the rule to the data and decision in the question.

This matters because b - distinction between income and wealth determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - distinction between income and wealth to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - distinction between income and wealth is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between injections and withdrawals. withdrawals.

Use a - distinction between injections and withdrawals. withdrawals to connect the rule to the data and decision in the question.

This matters because a - distinction between injections and withdrawals. withdrawals determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - distinction between injections and withdrawals. withdrawals to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - distinction between injections and withdrawals. withdrawals is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Injections:; investment; government expenditure; exports.

Use b - injections: • investment • government expenditure • exports to connect the rule to the data and decision in the question.

This matters because b - injections: • investment • government expenditure • exports determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - injections: • investment • government expenditure • exports to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Injections: • investment • government expenditure • exports is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Withdrawals:; savings; taxation; imports.

Use c - withdrawals: • savings • taxation • imports to connect the rule to the data and decision in the question.

This matters because c - withdrawals: • savings • taxation • imports determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - withdrawals: • savings • taxation • imports to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - Withdrawals: • savings • taxation • imports is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The impact of net injections into, and net withdrawals from, the circular flow of income.

Use d - impact of net injections into, and net withdrawals from, the circular flow of income to connect the rule to the data and decision in the question.

This matters because d - impact of net injections into, and net withdrawals from, the circular flow of income determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply d - impact of net injections into, and net withdrawals from, the circular flow of income to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: d - impact of net injections into, and net withdrawals from, the circular flow of income is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The concept of equilibrium level of real national output. of real output.

Use a - concept of equilibrium level of real national output. of real output to connect the rule to the data and decision in the question.

This matters because a - concept of equilibrium level of real national output. of real output determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - concept of equilibrium level of real national output. of real output to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - concept of equilibrium level of real national output. of real output is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Causes of changes in equilibrium real national output, as a result of shifts in AD and/or AS curves.

Use b - causes of changes in equilibrium real national output, as a result of shifts in ad to connect the rule to the data and decision in the question.

This matters because b - causes of changes in equilibrium real national output, as a result of shifts in ad determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - causes of changes in equilibrium real national output, as a result of shifts in ad to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Causes of changes in equilibrium real national output, as a result of shifts in AD is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The multiplier and multiplier process.

Use a - multiplier and multiplier process to connect the rule to the data and decision in the question.

This matters because a - multiplier and multiplier process determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - multiplier and multiplier process to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - multiplier and multiplier process is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Marginal propensities and their effects on the multiplier:; the marginal propensity to consume (MPC); the marginal propensity to save (MPS); the marginal propensity to tax (MPT); the marginal propensity to import (MPM).

Use b - marginal propensities and their effects on the multiplier: • the marginal propensity to to connect the rule to the data and decision in the question.

This matters because b - marginal propensities and their effects on the multiplier: • the marginal propensity to determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - marginal propensities and their effects on the multiplier: • the marginal propensity to to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Marginal propensities and their effects on the multiplier: • the marginal propensity to is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Calculations of the multiplier using the formula 1/(1-MPC) and 1/MPW, where MPW = MPS + MPT + MPM.

Use c - calculations of the multiplier using the formula 1/(1-mpc) and 1/mpw, where mpw = mps + to connect the rule to the data and decision in the question.

This matters because c - calculations of the multiplier using the formula 1/(1-mpc) and 1/mpw, where mpw = mps + determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - calculations of the multiplier using the formula 1/(1-mpc) and 1/mpw, where mpw = mps + to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: use the formula and units given in the question, show the substitution and interpret the result; the calculation alone is not the conclusion.

The significance of the multiplier for shifts in AD and the level of economic activity.

Use d - significance of the multiplier for shifts in ad and the level of economic activity to connect the rule to the data and decision in the question.

This matters because d - significance of the multiplier for shifts in ad and the level of economic activity determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply d - significance of the multiplier for shifts in ad and the level of economic activity to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: d - significance of the multiplier for shifts in AD and the level of economic activity is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.