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When withdrawals exeed injections, AD is too low. The paradox of thrift suggests that if households increase their savings, they may not be saving at all due to the following downward multiplier, which reduces their national income, usually in a two sector economy
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Distinguish between withdrawals and injection expenditure in the economy by the Government?
withdrawals and injections are both a part of the circular flow of income. Injections are things that are providing finance or services into the economy for example exports. Withdrawals on the other hand are the things that are being taken out of the economy such as imports. If withdrawals are bigger then injections the country would be facing a deficit and negative economic growth. If withdrawals are less then injections then a country would be facing a budget surplus and economic growth.
What happens in the economic growth full employment internal price stability income distribution and poverty alleviation when the withdrawals exceed injections?
assignment is due on Tuesday :P HAHAHA! IMM students hey? Dont worry I was also looking for the answer!!! Good luck, Tuesday is Dday!!
When withdrawals exceed injections national income will do what?
When planned withdrawals are more than planned injections, there is too little aggregate demand. I'm no economics expert so i don't know whether this would lead to a downward mutipler or a negative accelerator effect. Withdrawals are savings, taxes and imports and it seems to me that if savings increase, there would be a negative accelerator effect, but if imports increase, there would be a downward multiplier, but don't take my word for it.
With reference to the circular flow model of the economy explain what happens to economic growth unemployment and inflation when injections exceed withdrawals or leakages?
When injection exceeds leakage aggregate demand will high it followed by high employment , with rise in price economic growth will ensures . For detail explanation you can take from Tutorpace
How do injections and withdrawals affect the size of the circular flows of income and expenditure in an economy?
Ffff
Distinguish between withdrawals and injection expenditure in the economy by the Government?
withdrawals and injections are both a part of the circular flow of income. Injections are things that are providing finance or services into the economy for example exports. Withdrawals on the other hand are the things that are being taken out of the economy such as imports. If withdrawals are bigger then injections the country would be facing a deficit and negative economic growth. If withdrawals are less then injections then a country would be facing a budget surplus and economic growth.
What happens in the economic growth full employment internal price stability income distribution and poverty alleviation when the withdrawals exceed injections?
assignment is due on Tuesday :P HAHAHA! IMM students hey? Dont worry I was also looking for the answer!!! Good luck, Tuesday is Dday!!
When withdrawals exceed injections national income will do what?
When planned withdrawals are more than planned injections, there is too little aggregate demand. I'm no economics expert so i don't know whether this would lead to a downward mutipler or a negative accelerator effect. Withdrawals are savings, taxes and imports and it seems to me that if savings increase, there would be a negative accelerator effect, but if imports increase, there would be a downward multiplier, but don't take my word for it.
With reference to the circular flow model of the economy explain what happens to economic growth unemployment and inflation when injections exceed withdrawals or leakages?
When injection exceeds leakage aggregate demand will high it followed by high employment , with rise in price economic growth will ensures . For detail explanation you can take from Tutorpace
How do injections and withdrawals affect the size of the circular flows of income and expenditure in an economy?
Ffff
With reference to the circular flow model of the economy explain what happens to economic growth unemployment and inflation when injections exceed withdrawals?
im not too sure if im correct but injections exceeding withdrawals mean inflation increases as theres TOO MANY PEOPLE AND MONEY CHASING TOO FEW GOODS....this means that producers will increase the price of the good so that they will be able to bring demand to an equilibrium point... because inflation has increased the monetary committee will increase interest rates thus causing unemployment to increase as producers will not be able to pay wages ......... or something like that ONCE AGAIN IM NOT COMPLETELY SURE IF IM RITE
How do injections and withdrawals effect economic activity?
Injections include Export revenue, Investment and Government expenditure. Withdrawals include Saving, Tax, Import expenditure. All of it affects the component of Aggregate Demand hence affects the economic activity. For e.g. High savings would mean low consumption. This would cause some firms to make losses and leave the industry etc.
Export means outflow of goods and services whereas import is inflow of goods and services That's why export is a component of withdrawals whereas import is a component of injections?
tae!! haha :P
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What happens to aggregate income and withdrawals when exports increase?
there is no answer hahahaha / oh very intelligent - well done !!
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