Actual Growth & Long-term Growth Actual growth?can be differentiated from the idea of?long-term trends?in growth rates A long-term growth trend is the underlying?trend rate of economic growth?o...
Causes of Economic Growth Economic growth can occur in the short-run or long-run and each is explained differently Short-run Economic Growth Changes to any of the?components of aggregate demand?(AD...
The Multiplier The multiplier ratio is the ratio of change in real income to the injection that created the change E.g. If the UK government injected an additional ￡5m into the economy through gove...
Real National Output Equilibrium Short-run Equilibrium Real national output equilibrium?occurs where?aggregate demand?intersects with?aggregate supply A diagram showing the Classical short-run equi...
Injections & Withdrawals Money?can?enter or leave?the circular flow of income in an economy Injections?add?money?into the circular flow of income and?increase its size Increased government spen...
The Circular Flow of Income The?circular flow of income?is an?economic model?that illustrates?money flows?in an economy There is a simple model which shows the?money flows?between?households?and?fi...
Keynesian Versus Classical Long-run AS Long run aggregate supply (LRAS)?is influenced by a change in the?productive capacity?of the economy Productive capacity is changed by changes to the?quantity...
Factors Influencing Short-run AS There are multiple factors that can?influence?the?short-run aggregate supply (SRAS). These include: Changes in costs?of raw materials and energy Changes in?exchange...
The Aggregate Supply (AS) Curve Aggregate supply?is the total supply of goods/services produced within an economy at a?specific price level at a given time A diagram showing the upward sloping shor...
