We have looked at the basic circular flow of income and spending that illustrates the macro economy. Changes in the components in this model can lead to changes in the level of a country’s national income. For each of these events, consider whether the economic event that is described will lead either to a change in an injection /leakage and whether the effect is likely to cause an expansion () or a contraction () in the level of national income, by clicking on each relevant selection. If you change your mind, click again to deselect. For each example, assume ceteris paribus.

When you have considered each event you will be presented with your responses and at the bottom of the screen there will be a space for you to make key summary points and print out.