A model that indicates how money moves throughout an economy, between businesses and individuals. Investors spend their income by consuming goods and services from businesses, paying taxes and investing in the stock market. Businesses use the money spent by individuals while consuming and the money raised from selling stock to pay for capital to run their business, purchase material to manufacture products and to pay employees. All expenditures from individuals become the income of the businesses, and the expenditures of the businesses become the income of the individuals.
Related information about circular flow of income:
- Circular flow of income - Wikipedia, the free encyclopedia
In economics, the terms circular flow of income or circular flow refer to a simple economic model which describes the reciprocal circulation of income between ...
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Sep 15, 2011 ... This is a basic way of understanding how different parts of the economic system fit together. The circular flow of income shows connections ...
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Definition of circular flow of income: A model that indicates how money moves throughout an economy, between businesses and individuals. Investors spend ...
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The model around which this chapter is built is the circular flow of income and product—that is, the flow of goods and services between households and firms, ...
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Understanding the flow of resources in the simplest possible economy.
- Circular Flow Of Income Definition | Investopedia
The circular flow of income is a neoclassical economic model depicting how money flows through the economy. In the most simple version, the economy is ...
- Circular flow of income - YouTube
In economics, the terms circular flow of income or circular flow refer to a simple economic model which describes the reciprocal circulation of income between ...
- Circular flow of income - Economics Online Home
National income, output, and expenditure is generated by the activities of the two most important parts of an economy, its households and firms, as they engage ...