The planned expenditure line will shift upwards, because people will pay more in the shops on tobacco products

The planned expenditure line will shift downwards, because people will buy fewer cigarettes, so their spending on tobacco after allowing for the tax will be lower

The withdrawals line will end up shifting downwards, because the rise in the tax will cause people to save less

The injections line will shift downwards, because this includes all government spending net of taxes

The multiplier in a four-sector economy equals 1/(1-MPEY)

The multiplier in a four sector economy equals 1/(MPSY)

The size of the multiplier increases if the W line becomes flatter

The balanced budget multiplier means that if the government increases its taxes and purchases by the same amount, output might still increase

Sight deposits can be withdrawn on demand without penalty

No deposits can be bought and sold

With repos, people who pay money to a bank are given securities rather than a normal type of deposit

Capital includes money put up by the banks’ shareholders and money from past profits

A bank’s reserves are all held as cash in its branches

Market loans include between one bank and another

Securities include bills, bonds, and equities

Over half the assets are denominated in currencies other than sterling

Financial intermediaries offer risk transformation and maturity transformation

The Bank of England may act as a lender of last resort

A bank can increase its capital adequacy ratio by switching some funds from advances to buying more company shares

A bank can increase its capital adequacy ratio by selling some company shares and lending the proceeds as mortgages