Circular flow of income
Circular Flow of Income Model
We start our study of macroeconomics Macroeconomics is a part of the subject that considers the economy as a whole. When we study macroeconomics we look at changes in economic growth; inflation; unemployment and our trade performance with other countries (i.e. the balance of payments). The scope of macroeconomics also includes an evaluation of the relative success or failure of government economic policies. by introducing the idea of the circular flow The circular flow of income is a diagrammatic representation of economic activity in a given time period. It identifies the main sectors in the economy (households, firms the government and overseas) and linkages between sectors e.g. wages government spending & interest payments – a way of representing the main agents in the economy and how they link together.
The economy comprises millions of economic agents – be they households, firms or the government. Together their decisions in markets and industries throughout the economy generate an aggregate level of
E_________,
O______________ and
I_________________Income represents a flow of earnings from using factors of production to generate an output of goods and services
The circular flow of income is a simple but important way of illustrating the flows of goods and services and incomes accruing to factors of _________________ Production involves in nearly all cases, using up scarce resources. Production can take place at various levels - ranging from primary industries in which basic resources are extracted through manufacturing and construction (secondary industries) to tertiary and quaternary industries (the service sector).Production refers to the output of goods and services produced within a market in a given time period between firms and households. There is a continuing flow of spending between purchasers who desire to buy, the factor incomes received from supplying their needs and still further purchases – one person’s
We start our study of macroeconomics Macroeconomics is a part of the subject that considers the economy as a whole. When we study macroeconomics we look at changes in economic growth; inflation; unemployment and our trade performance with other countries (i.e. the balance of payments). The scope of macroeconomics also includes an evaluation of the relative success or failure of government economic policies. by introducing the idea of the circular flow The circular flow of income is a diagrammatic representation of economic activity in a given time period. It identifies the main sectors in the economy (households, firms the government and overseas) and linkages between sectors e.g. wages government spending & interest payments – a way of representing the main agents in the economy and how they link together.
The economy comprises millions of economic agents – be they households, firms or the government. Together their decisions in markets and industries throughout the economy generate an aggregate level of
E_________,
O______________ and
I_________________Income represents a flow of earnings from using factors of production to generate an output of goods and services
The circular flow of income is a simple but important way of illustrating the flows of goods and services and incomes accruing to factors of _________________ Production involves in nearly all cases, using up scarce resources. Production can take place at various levels - ranging from primary industries in which basic resources are extracted through manufacturing and construction (secondary industries) to tertiary and quaternary industries (the service sector).Production refers to the output of goods and services produced within a market in a given time period between firms and households. There is a continuing flow of spending between purchasers who desire to buy, the factor incomes received from supplying their needs and still further purchases – one person’s