2.2 Is income the same as wealth?

Tuesday, May 21, 2013

What students need to learn:

Students should be able to:
Additional Guidance Notes
National income
Understand that national income can be shown as a circular flow.
Students might find it helpful to draw a simple diagram of the circular flow of income.
Income and wealth
Understand the likely correlation between income and wealth.
Wealth may be considered as a stock concept, while income is a flow.
Injections and withdrawals
Analyse the impact of injections and withdrawals on the circular flow. For example, an increase in investment may increase the spending in an economy as well as productive capacity.
Students are not expected to have knowledge of the accelerator.
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