Five-sector circular flow, the multiplier and the mpc

What this note covers

1. From a simple flow to a five-sector economy
2. Leakages and injections: matching the pairs
3. Equilibrium national income: when leakages equal injections
4. The marginal propensity to consume and its role
5. The expenditure multiplier: what it means and its course boundary
6. Worked example: an injection into Boonaville's economy
7. How this topic is examined and what earns full marks

7 sections · 10 key terms & formulas · 6 common mistakes