Explain the Circular Flow of Income and how can the circular flow enhanced?
The factor owners spend this income on goods which leads to a circular flow of income. ... The circular flow of income shows the flow of money from economic activity between households and firms. Households receive payments for their services (income) and use this money to buy the output of firms (consumption).
Circular flow of income can be increased with exports , consumption. The reason is that they are injections in circular flow of income and main equality in consumption and production
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