《上海财大ACCA F1讲义3》.pptVIP

Chapter 3;1 The structure and objectives of the economy ;;1.2 Withdrawals and injections into the circular flow of income Withdrawals: savings, taxation, import expenditure Injections: investment, government spending, export income Financial sector: saving, investment spending Government sector: taxation, government spending Foreign sector: import demand, export demand Changes in behaviour of one of the components of the circular flow can lead to significant changes in economic performance as a whole. ;2 Factors which affect the economy;;;;;;;;3 The determination of national income;;;;;3.7 Summary An equilibrium national income will be reached where aggregate demand equals aggregate supply. One is at a level of demand which exceeds the productive capabilities of the economy at full employment, and there is insufficient output capacity in the economy to meet demand at current prices. There is then an inflationary gap. The other is at a level of employment which is below the full employment level of national income. The difference between actual national income and full employment national income is called a deflationary gap. To create full employment, the total national income must be increased by the amount of the deflationary gap. ;4 The business cycle;;;Questions;5 Inflation and its consequences;;;;;;;;;;;Questions;6 Unemployment;;;;;;;Questions;;;7 The objectives of economic growth;7.2 Actual growth Actual growth in the long run is determined by two factors The growth in potential output (aggregate supply) The growth in aggregate demand (AD) 7.3 Potential growth The causes of growth in potential output are the determinants of the capacity of the economy ( the supply side) rather than actual spending (the demand side) There may be increases in the amount of resources available Land and raw materials Labour (the size of the working population) Capital Increases in the productivity of resources;;;;;Questions;8 Government policies for managing the economy;;8.3 Econo