11+ Circular Flow Diagram Macroeconomics. Learn about economics circular flow macroeconomics with free interactive flashcards. The circular flow model of the economy distills the idea outlined above and shows the flow of money and goods and services in a capitalist economy.
This youtube channel has over 300 videos explaining all the key concepts and graphs of micro and macroeconomics. It is defined as the flow of payments and receipts for goods, services and factor services between household and firm sector of the economy. This was based on a number of assumptions that we now begin to relax, the most important of these that there are only two sectors in the economy.
Since this site is focused on the introductory microeconomics and macroeconomics, only a simplified circular flow diagram is discussed below.
11+ Circular Flow Diagram Macroeconomics. Circular flow diagram is a visual model of the economy that shows how dollars flows through markets among households and firms. Most of the concepts shown here will be familiar to anyone with a knowledge of mainstream macroeconomics. Exports are goods and services produced in one country and purchased by households, firms, and governments of another country. The circular flow diagram displays the relationship of resources and money between firms and households.