Explain components of AD / National Income 

C: Consumption – what does consumption depend on?                                   

1. Level of real disposable income
2. MPC: Marginal Propensity to consume
3. Availability of credit
4. Rate of Interest
5. Rate of taxation

I: Investment – what does investment depend on? 

1. Rate of interest
2. Business confidence / expectation

G: Government spending –

1. Government spending on goods and services eg.

eg. paying teacher salary

2. Decisions by politicians – eg. fiscal policy

X: Exports – what do exports depend on? 

1. Income level in export markets
2. Competitiveness of Irish Exports
3. Value of Euro compared to other currencies

M: Imports – Determinants 

1. Levels of income rise
2. Value of Euro compared to other currencies
3. The higher the MPM (Marginal propensity to import