INTRO - Lesson 1 Notes: Money flows form the business...

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Lesson 1 Notes: Money flows form the business sector to the households in the form of wages, salaries, rent interest and profits Money flows back into the business sector when house holds buy goods and services Condition for equilibrium GDP: Injection ($) = Leakages ($) Injections include: Investments, Exports and Government Expenditures Leakages include: Imports, savings and taxes Foreign Trade Sectors: o Exports represent income for Canadian Businesses and causes the GDP to increase o Imports result in money being paid to foreign businesses rather than our own country and causes the GDP to decrease Discretionary Income is the income that you have left after you have paid taxes (PDI-(food + shelter)) Components of Aggregate Expenditure: o Whenever the level of spending in the economy changes, the level of GDP changes o The total level of spending in the Canadian economy I called AGGREGATE EXPENDITURE o Aggregate Expenditure is made up of: Consumption (p. 176-180) Investment (p. 181-183) Government Spending (p. 183-184) Exports Less Imports Factors Affecting Consumption:
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INTRO - Lesson 1 Notes: Money flows form the business...

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