Circular flow of income

The circular flow of income diagram shows the participants in a four-sector market economy. As a part of economics and general finance, we all are taught how the economy can reproduce itself.

Circular flow of income showcases the movement of money in an economy. It establishes a relationship between national income and expenditure. The sample paper from Totalassignmenthelp.com will help you to understand about circular flow, national income and national statistics.

What is the circular flow? The circular flow of income and spending shows connections between different sectors of an economy

Example 4: 3 Sector Circular Flow Diagram This Economy infographic represents the three-sector circular flow of income model. The economy consists of three sectors: households, business, and government. You can observe the flows from the households and business to the government in the form of taxes, labor, goods, and services.

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Learn about the circular flow of income model. Understand how your economy works and how we achieve economic growth. Revise the material and prepare for you exams.

In a two sector model, there are only two sectors (households and businesses), but the three sector model has government as well.