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    Notes 201001 100758 f5f PDF

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    sharique alam
    The circular flow of income refers to the continuous flow of money, goods, and services between two main sectors of the economy: households and businesses. There are two types of circular flow - real/physical flow involving the exchange of goods and services, and monetary/money flow involving the exchange of factor incomes like wages from businesses to households in exchange for labor services. Under the real flow, households supply labor and capital to businesses, who then supply goods and services to households.

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    Notes 201001 100758 f5f PDF

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    sharique alam
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    The circular flow of income refers to the continuous flow of money, goods, and services between two main sectors of the economy: households and businesses. There are two types of circular flow - real/physical flow involving the exchange of goods and services, and monetary/money flow involving the exchange of factor incomes like wages from businesses to households in exchange for labor services. Under the real flow, households supply labor and capital to businesses, who then supply goods and services to households.

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    The circular flow of income refers to the continuous flow of money, goods, and services between two main sectors of the economy: households and businesses. There are two types of circular flow - real/physical flow involving the exchange of goods and services, and monetary/money flow involving the exchange of factor incomes like wages from businesses to households in exchange for labor services. Under the real flow, households supply labor and capital to businesses, who then supply goods and services to households.

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    32 views1 page

    Notes 201001 100758 f5f PDF

    Uploaded by

    sharique alam
    The circular flow of income refers to the continuous flow of money, goods, and services between two main sectors of the economy: households and businesses. There are two types of circular flow - real/physical flow involving the exchange of goods and services, and monetary/money flow involving the exchange of factor incomes like wages from businesses to households in exchange for labor services. Under the real flow, households supply labor and capital to businesses, who then supply goods and services to households.

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    . Circular flow of income.

    It refers to flow of money, income or the flow of goods and services across different sectors of
    the economy in a circular form.
    There are two types of Circular flow:
    (a) Real/Product/Physical Flow
    (b) Money/Monetary/Nominal Flow
    (a) Real flow
    (i) Real flow of income implies the flow of factor services from the household sector to the
    producing sector and corresponding flow of goods and services from the producing sector to
    the household sector.

    (b) Money Flow


    (i) Money flow refers to the flow of factor income, as rent, interest, profit and wages from the
    producing sector to the household sector as monetary rewards for their factor services.

    Last modified: 25 Sep 2020

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