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Tuesday, March 12, 2013

Circular Flow of Income and Expenditures

If you are struggling with the circular flow diagram, take a look at this video. It gets to the point. But, be careful - it's a little too simple. Clearly, the economy has more than one person. Also, this model does not allow for leakages and injections, which are crucial for understanding things like growth and determination of the level of employment.

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