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  • Explain the circular flow of income. - Toppr
    The Circular flow of income can be better understood with help of following diagram: Incomes are first generated in production units due to the joint efforts of factor owners from household These incomes are distributed to the factor owner who in turn spend the income on purchasing goods and services produced in production units
  • What is meant by circular flow of income? - Toppr
    Circular flow of income refers to cycle of generation of income in the production process, its distribution among the factors of production and finally, its circulation from households to firms in the form of consumption expenditure on goods and services produced by them
  • What are the different phases of circular flow of income? - Toppr
    Circular flow of income refers to unbroken circularity of real flows and money flows across the different
  • Describe the circular flow of income in a two-sector economy . . . - Toppr
    Circular flow of income in a two-sector economy without savings and investment: Participants of the two-sector economy are households and producers Flow of money from producers to households as payments for the purchase of factor services has been a continuous process
  • Households and firms depend on each other in the circular flow of . . .
    Households and firms depend on each other in the circular flow of income in case of a two-sector model Participants of the two-sector economy are households and producers Flow of money from producers to households as payments for the purchase of factor services has been a continuous process
  • What is the circular flow of income? - Toppr
    The term 'economic agents' refers to the households in the economy, who provide factors of production and earn income; the firms in the economy, who employ factors of production and sell output produced to generate revenue; and the government who plays an active role in providing the economic infrastructure and collects revenue for the same
  • Which of these is a leakage from circular flow of income? - Toppr
    Leakage from the circular flow of income uses of income, including savings, taxes, and imports Savings by businesses that otherwise would have been put to use are a decrease in the circular flow of an economy's income hence it is a leakage So a is the correct answer
  • What is meant by the circular flow of income? - Toppr
    It refers to the flow of goods and services across different sectors of the economy It refers to the flow of money in terms of receipts and payments across different sectors of the economy Circular flow of income: It refers to unbroken circularity of real flows and money flows across different sectors of the economy
  • Explain the importance of circular income flows. - Toppr
    The following is the importance of circular income flows: 1 It establishes a link between producers and consumers 2 It is through income that producers buy the services of the factors of production with which the latter, in turn, purchase goods from the producer 3 It helps in calculating national income on the basis of the flow of funds
  • Injection into the circular flow are - Toppr
    Injections are variables in an economy that add to the circular flow of income, and include investment (I) government spending (G) and exports (X) The circular flow will adjust following new injections into it or new withdrawals (aka leakages) from it An injection of new spending will increase the flow





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