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In the simplified circular flow diagram, leakage can occur when consumers save some income.
Net Increase
The difference between the current and previous period's amounts, indicating growth when positive.
Investment Account
An account held at a financial institution that is used to buy and hold various investment assets, like stocks, bonds, mutual funds, and ETFs, often used for long-term financial goals.
Equity Method
An accounting technique used to record the investments made in other companies, reflecting the investor's proportional share of the investee's net income or loss.
Undervalued Inventory
Undervalued inventory occurs when the recorded cost of inventory is less than its current market value, potentially misstating a company's financial position.
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