10+ Expanded Circular Flow Diagram. An economy is all about satisfying the coincidence of wants of different people. Even most children can understand its basic structure from personal experience.
The circular diagram (also called the circular model) is perhaps the easiest diagram of economics to understand. Figure 2 presents an expanded circular flow diagram that illustrates how the financial system, the government sector, and the foreign sector affect the aggregate flow this circular flow has leakages. The flows of money through the economy the national accounts almost all countries calculate a set of numbers known as the national income and product accounts.
Rent, wages, profit & interest expanded circular flow diagram government purchases of goods and services firms households gdp imports exports taxes bonds stock government investment financial market candy loo brendan cockburn government taxes government transfers private savings.
10+ Expanded Circular Flow Diagram. The circular flow diagram is a visual model of the economy that shows how dollars flow through markets among households and firms. The flows of money through the economy the national accounts almost all countries calculate a set of numbers known as the national income and product accounts. It illustrates the interdependence of the flows, or activities, that occur in the economy, such as the production of goods and services (or the output of the economy). The image below shows an expanded circular flow diagram, which tracks how money flows through an economy.