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National income 2.4
Injection and withdrawals 2..4.2
multiplier effect on income
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Cards (3)
what happens when there's an injection in the circular flow?
actual change
in
national
income>than
initial
injection
called
multiplier effect
what does the size of the multiplier effect depend on?
rate
at which
money
leaks
from the
circular
flow-
e.g
bigger
the
leakages
,
quicker
the
money
leaves
the
circular
flow
and
smaller
the
effect
is
if
lots
of
money
spent
on
imports
,
multiplier effect
quite
small
as the
injection quickly leaks
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