14+ Circular Flow Of Income Diagram. This circular flow of income also shows the three different ways that national income is calculated. The circular flow model of economics shows how money moves through an economy in a constant loop from producers to consumers and back again.
There are different ways to attract money. Learn about circular flow of income topic of commerce in detail explained by subject experts on vedantu.com. Financial institutions can raise their interest rates, the.
The circular flow diagram shows that national income may be measured by final output or product (product or output method), final incomes (income method) and final expenditure (expenditure method).
14+ Circular Flow Of Income Diagram. The circular flow of income or circular flow is a model of the economy in which the major exchanges are represented as flows of money, goods and services, etc. But before we look at these concepts, it is important that you understand the 'big picture'. The circular flow model or circular flow of income shows how different units in an economy interact and how household consumption is a firm's income. This is shown as the flow of income between firms and households on the diagram.