| A | B |
|---|
| National income | The total amount of income earned in an economy. |
| Aggregate demand | The total amount spent in an economy on its output. |
| Circular flow of income | A simple way of showing how output |
| Injections | Money entering the circular flow of income. |
| Withdrawals | Also known as leakages. Money leaving the circular flow of income. |
| Recession | When an economy has negative growth in output. |
| Boom | When an economy has bigger growth than normal in output and national income. |
| Depreciation | Also known as capital consumption. The loss in value of an asset over a period of time. |
| Crowding out | When public sector spending increases and private sector spending decreases. |
| Net property income from abroad | Income received from abroad minus the money paid out to foreigners for assets they own in our economy. |
| Gross Domestic Product | The total value of output produced by all domestic firms. |
| Gross National Product | The total output of an economy. Gross Domestic Product plus Net property income from abroad. |
| Net National Product | The total output of an economy (GNP) minus depreciation. |
| Households | The owners of factors of production. |
| Firms | Producers of goods and services. |
| Consumption expenditure | The income households spend on firms’ output. |
| Equilibrium | When an economy is in a state of balance. |
| Disequilibrium | When an economy is not in a state of balance. |
| Business cycle or trade cycle | The continuous ups and downs in national income for an economy. |
| Inflation | An increase in the general level of prices. |
| Multiplier effect | When a small change in spending can cause large changes in income |
| Economic recession | A poor period for an economy. It is a time of negative economic growth. |
| Economic growth | The increase in output of goods and services by an economy over a given time period. |
| Gross Domestic Product (GDP) | The measure of economic growth. |
