Explain:
The Circular flow of Income:
Income-
Explain:
Withdrawals -
Definition – A model of the economy, which shows the flow of goods, services and factors and
their payments around the economy.
Wealth -
Note:
- The total value of the flow is the GDP of the economy, if the flow expands, so does the GDP.
- Therefore when in equilibrium, injections must equal withdrawals.
- There are lag times between different areas, also not all areas flow equally as fast.
Injections -