25 February – IB Economics Review Introduce 2.1: The level of overall economic activity Examine circular flow of income If time: Apply the circular flow of income to GDP How does the circular flow of income change in an open economy?

Syllabus Item 78 Describe, using a diagram, the circular flow of income between households and firms in a closed economy with no government. Describe, using a diagram, the circular flow of income in an open economy with government and financial markets, referring to leakages/ withdrawals (savings, taxes and import expenditure) and injections (investment, government expenditure and export revenue).

Possible ways to show circular flow of income “The circular flow of income is a neoclassical economic model depicting how money flows through the economy.”  Source: http://www.investopedia.com/terms/circular-flow-of-income.asp  

Source: http://www. dineshbakshi

Source: http://2. bp. blogspot

Source: http://thepeaktimes. files. wordpress

Business basics: Declan Curry explains what GDP is http://news.bbc.co.uk/2/hi/business/8637712.stm

Syllabus http://ibeconomics-isd.weebly.com/