This resource introduces the Circular Flow of Income model and the Multiplier. It is aimed at Year 12 students (AS Level) and is a foundation for the A Level course.
The following resources are included:
- Revision notes for students (2,000 words / 6 pages).
- Typical exam questions (15).
- Model answers.
All resources are in Microsoft Word format (so that you can amend them if you wish).
You are welcome to print / copy these resources for your students, or put on your internal VLE – but please do not share with other institutions or put on an external website.
The following concepts are covered:
■ The Circular Flow of Income, including injections and withdrawals.
■ Measuring the size of the economy: National Output/Income/Expenditure.
■ GDP & GNP.
■ Nominal vs Real rises in GDP.
■ Income vs Wealth.
■ The Multiplier effect.
■ Average vs Marginal propensity to consume / save.
■ Calculating the multiplier (incl. marginal propensity to save, tax & import).