Circular Flow of Income and Expenditure Homework Help

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In an economy, the people shall need to buy products and services to get through their daily necessities. Such transactions are expenditures by the consumers. This money is now owned by the sellers. The money is used to settle the employment costs and maintenance costs by the seller. Such transactions are from the income side. For further knowledge, go through Circular Flow of Income and Expenditure Homework Help. Thus, the money keeps on flowing. This is typically termed Circular Flow of Income and Expenditure. The entire concept can be lucid. For detailed account, go through Circular Flow of Income and Expenditure Homework Help.

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Aspects of Circular Flow of Income and Expenditure

1. Two sector economy: This economy consists of the buyers and sellers only. The flow of money is from households or buying units to the sellers or producing units. But it is necessary to enumerate that the households provide money for buying commodities by getting them from the sellers as wages. This is how the circulation works. For more information, go through Circular Flow of Income and Expenditure Homework Help.

2. Three sector economy: In this economy, there is intervention from the government. And hence the name. In this case, the government looks after the betterment of the people and sellers. For keeping up the work, the expenditure is collected from both buying and selling parties in the form of taxes and other charges. For more insight, refer Circular Flow of Income and Expenditure Homework Help.

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