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This powerpoint is purposefully made for A Level Economics using the most recent Cambridge syllabus.

It fully covers - 9.1 The circular flow of income

9.1.1 the multiplier process:
• definition of the multiplier
• formulae for and calculation of multiplier in a closed and open economy, with and without a government sector
• calculation of:– average and marginal propensities to save (aps and mps) – average and marginal propensities to consume (apc and mpc) – average and marginal propensities to import (apm and mpm)– average and marginal rates of tax (art and mrt)
• national income determination using AD and income approach with the multiplier process
• calculation of effect of changing AD on national income using the multiplier

9.1.2 components of Aggregate Demand (AD) and their determinants:
• consumption function: autonomous and induced consumer expenditure
• savings function: autonomous and induced savings
• autonomous and induced investment; the accelerator
• government spending
• net exports (exports minus imports)

9.1.3 full employment level of national income and equilibrium level of national income:
• inflationary and deflationary gaps