circular flow of economic activity pdf

The counterclockwise arrows represent the flow of money. stream stream stream 0000005606 00000 n THE CIRCULAR FLOW OF ECONOMIC ACTIVITY Stock and Flow Concepts The Circular Flow of Goods, Services, and Income The Production Process The Flow of Goods Among Producing Firms Goods and Income Flow Among Households and Various Types of Producers Income Flow The Concept of Equilibrium The … 0000023379 00000 n endobj endobj Thus, one of the important conditions for the economy to be in equilibrium is that its circular flow of economic activities among the different sectors of the economy must be maintained, i.e., whatever is earned in the form of income (10 by the factors of production must be spent by them either on consumption (C) or on investment (I), so that in the ultimate .analysis, theoretically at least, Y – C + I … xref �[email protected]� �0& x�3R��2�35W(�*T0P�R0T(�[email protected]��� 0000030657 00000 n 37 0 obj In carrying out these economic activities, people make transactions between different sectors of the economy. Therefore, GDP is an imperfect indicator of living standards. 500 0 obj <> endobj endobj x�3R��2�35W(�*T0P�R0T(�[email protected]��� /XObject <> 0000011454 00000 n x�3R��2�35W(�*T0P�R0T(�[email protected]��� endobj �����c����� k�� 0000003060 00000 n 61 0 obj THE CIRCULAR FLOW OF ECONOMIC ACTIVITY 2. 0000052688 00000 n /Resources 46 0 R /Filter /FlateDecode /Length 111 >> stream CIRCULAR FLOW OF. 5 0 obj <> 0000026087 00000 n 2. 0000032689 00000 n endobj 55 0 obj endobj �[email protected]� �0&��52�342�s�C|�\�� �lj The term circular flow of income or circular flow of economic activity refers to “a simple economic model which describes the circulation/flow of income between producers and consumers”.• In the circular flow model, producer and consumer are referred to as "firms" and "households" respectively. endobj endobj 0000053145 00000 n endobj x�3R��2�35W(�*T0P�R0T(�[email protected]��� <> This activity will help you analyze these relationships using the infographic poster that accompanies it. 20 0 obj x�3R��2�35W(�*T0P�R0T(�[email protected]��� 51 0 obj <> <> /Resources 48 0 R /Filter /FlateDecode /Length 68 >> 15 0 obj �[email protected]� �0&��52�342�s�C|�\�� �2: endobj <> 0000004226 00000 n stream x�3R��2�35W(�*T0P�R0T(�[email protected]��� endstream Production b. 25 0 obj endobj Lesson 3.5 The Circular Flow of Economic Activity Objectives: 1. endstream 36 0 obj 0000017457 00000 n stream 70 0 obj <> �����c����� ks� Consumption c. Exchange d. All of the above 53. 11 0 obj Show how important the three main producing sectors in economy in making a choice of what business to establish To further guide the students on how the market works, this section describes the various economic activities that take place in an economy. stream View ECON - Circular Flow Activity (1).pdf from ECON 101 at Dr. Phillips High School. To this we add the government sector so as to make it a three-sector closed model of circular flow of economic activity. <> Because of these transactions, income and expenditure move in circular form. <> 0000032182 00000 n �[email protected]� �0& 35 0 obj subsidies on products. • However, year on year changes in GDP are a good indicator of the state of the business cycle. endobj endobj 0000021328 00000 n �[email protected]� �0&��52�342�s�C|M\�� ��m 8 0 obj endstream <> 28 0 obj endobj �[email protected]� �0&��52�342�s�C| \�� �^h endstream endobj �[email protected]� �0&��52�342�s�C|,\�� �\@ stream 0000047787 00000 n • In equilibrium, planned spending must equal actual spending in the economy. 0000050653 00000 n �[email protected]� �0&��52�342�s�C|L\�� �@< 18 0 obj 21 0 obj �[email protected]� �0&��52�342�s�C|\�� �7 0000107073 00000 n <> 1.7. The Circular Flow in a Three-Sector Economy: So far we have been working on the circular flow of a two-sector model of an economy. 0000029933 00000 n THE CIRCULAR FLOW OF ECONOMIC ACTIVITIESThere are two basic activities undertaken in any economy: PRODUCTION AND CONSUMPTION.FIRMS – they perform the production function or the basic producing units.HOUSEHOLDS – undertake consumptionor the basic consuming units.To be able to produce, … endobj /Resources 48 0 R /Filter /FlateDecode /Length 68 >> Project Visual 10.2, and ask the students to compare this diagram with the diagram on Activity 10.5. �����ch����� {{ 6.1. <> endstream The circular flow model is a diagram illustrating the flow of spending and income in an economy. �����cd����� {K x�3R��2�35W(�*T0P�R0T(�[email protected]��� �[email protected]� �0& 24.5 CIRCULAR FLOW OF INCOME Accounting Production, consumption and investment are important economic activities of an economy. <> 17 0 obj stream This is referred to as the … 0000034257 00000 n endobj endobj 50 0 obj The most common form of this model shows the circular flow of income between the household sector and the business sector. �����ch����� {f <> endobj The clockwise arrows represent the flow of goods and services. /Resources 48 0 R /Filter /FlateDecode /Length 68 >> CIRCULAR FLOW OF ECONOMIC ACTIVITIES THE FLOW OF PRODUCTION, INCOME, & EXPENDITURE NEVER STOPS . /Resources 48 0 R /Filter /FlateDecode /Length 68 >> stream These scarce resources are used in the production of goods and services. 0000056668 00000 n 0000014160 00000 n x�3R��2�35W(�*T0P�R0T(�[email protected]��� /Resources 48 0 R /Filter /FlateDecode /Length 69 >> <> endstream It shows the redistribution of income in a circular manner between the production unit (firms) and households. x���aZ�J`�6��D\��e%�Jԕ(+�{/�:==���t�I���6�m'�K2�@�����N!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!���h��������Ѯ.s�7;���O���6�����„„„„„�%��|�ՁN��;��!#+7Gm}oy1#!� !� !� !� !� !���D��/�{�a?�W=��:0_��e��6�����„„„„„„�� _ҁlMr�ͅ-���G��HaBaBaBaBaBaJ'/9��|�i�(� !L!L!L!L!L!l-%�xF�Xm�:U:�r���g�R��7J!L!L!L!L!,P���tŰ�8���l:�WqJ�� !� !� !� !� !��-Ql�+�~����}FBBBBBB�䍞��a�Ȯ.ls��z �=�%�&�&�&�&���=u� ���9�����IR�v !L!L!L!L!L!L!l�u�uNߣL�i��FNS3����Ջ !L!L!L!L!L!l-%��wŚ���^��+~-�Bov�#!� !� !� !� !� !�mrB��ۚo�u*����g����8��32B�B�B�B�B�B�ZJ'nk�N:����U~�e$�0!�0!�0!�0!�0!���%���s�}�������u�j�a�L5k. 24 0 obj The circular flow of economic activity worksheet is available as an add-on to almost any book on economics. /Resources 48 0 R /Filter /FlateDecode /Length 69 >> �[email protected]� �0& endstream 27 0 obj stream x�3R��2�35W(�*T0P�R0T(�[email protected]��� In this simple economy, individuals provide the labor that enables businesses to produce goods and services. endobj endstream 6 0 obj 6 8. stream 0000001596 00000 n x�3R��2�35W(�*T0P�R0T(�[email protected]��� <> stream 9 0 obj stream endobj x�3R��2�35W(�*T0P�R0T(�[email protected]��� endobj 0000016820 00000 n 0000057708 00000 n 22 0 obj <> x�3R��2�35W(�*T0P�R0T(�[email protected]��� 0 53 0 obj stream stream <> 0000005726 00000 n <> <> /Resources 48 0 R /Filter /FlateDecode /Length 69 >> 6.1 PRODUCTION In the last lesson you have read about scarcity of resources and making choice. >> 0000110844 00000 n 3 0 obj These activities are represented by the green lines in the diagram. 0000110208 00000 n 0000055712 00000 n 39 0 obj x�3R��2�35W(�*T0P�R0T(�[email protected]��� stream x�3R��2�35W(�*T0P�R0T(�[email protected]��� <> stream 45 0 obj �[email protected]� �0& endobj endstream endstream LESSON 10 THE CIRCU AR FLOW OF ECONOMIC ACTIVITY 12. 29 0 obj x�3R��2�35W(�*T0P�R0T(�[email protected]��� 31 0 obj endobj �[email protected]� �0& endobj <> x��„„„„��rE�f�y������B˯xf�$ޛ`$�0!�0!�0!�0!�0!���L�=e����t�����������i֊u�W�e$�0!�0!�0!�0!�0!�0!���� �_ߴ���%�����M�Q|[~���{[�uOFBBBBBB[K�b�a������k��5���� �a$�0!�0!�0!�0!�0!����(F�����;٫x5bC�� !L!L!L!L!L!�o����3���@��c�~���6T�x1#!� !� !� !� !� !�J�� �gi��:N��_�1��„„„„„��r��N��t��U��W��K������\���„„„„��R���邃��WQt2�N��_u��y !L!L!L!L!L!L!l-�lkv�a��osʆ��=�d�~��„„„„„��R��y!L� 56 0 obj endstream 41 0 obj endobj �����ch����� {t trailer 64 0 obj 0000012890 00000 n endobj Alternatively, one can think of these transactions in terms of the monetary flows that occur. <> 7 0 obj Circular Flow Infographic Activity (Answer Key) Economists create models to illustrate economic activity. stream endstream endobj 38 0 obj stream 23 0 obj It makes the circular flow of income complete and continuous. <> endobj �[email protected]� �0&��52�342�s�C| \�� �ei stream %PDF-1.6 62 0 obj In the upper loop of this figure, the resources such as land, capital […] 0000035905 00000 n 0000002293 00000 n �0D�=�\�ش��V���P� Aĕ�7ZL�-�g0(M��V40n�]�I60i��c��bX�a5���Җa2�BX���\�9"Y�=r멈����)qM x�3R��2�35W(�*T0P�R0T(�[email protected]��� stream endstream 1 0 obj 0000029052 00000 n The circular flow model shows us how households, businesses, and the government interact with one another in the economy. endstream “Unit 1.4 The Circular Flow Diagram (Activity)” What is Circular Flow of Income? The goal of. �[email protected]� �0& <> 0000109571 00000 n 66 0 obj x�3R��2�35W(�*T0P�R0T(�[email protected]��� <> endstream 0000004339 00000 n �[email protected]� �0&��52�342�s�C|�\�� ��n <> 33 0 obj <> x�3R��2�35W(�*T0P�R0T(�[email protected]��� 0000014048 00000 n 46 0 obj Financial market invests money by lending out money to households, firms and the government. x�3R��2�35W(�*T0P�R0T(�[email protected]��� �����c����� kz� This activity will help you … x�3R��2�35W(�*T0P�R0T(�[email protected]��� endobj <> <> �����c����� kl� endobj Figure 3-1: The Circular Flow by The Bureau of Economic Analysis is licensed under Public Domain. �[email protected]� �0&��52�342�s�C|\�� �$8 Basic Economic Activities Production • The use of economic resources in the creation of goods and services for the … /Resources 48 0 R /Filter /FlateDecode /Length 68 >> Circular Flow Concepts Product Market – where goods and services are exchanged Households – suppliers of the factors of production & demanders of goods and services Government – providers of public goods and services & demanders of both private goods and services and the factors of … /Resources 48 0 R /Filter /FlateDecode /Length 68 >> endstream �����ch����� {J 0000017586 00000 n stream Worksheet December 19, 2017. 49 0 obj 26 0 obj 42 0 obj (3) 4.1.2 Explain the item . �[email protected]� �0&��52�342�s�C|�\�� �N> 19 0 obj In other words, the theory suggests that money and goods from households go to businesses and then back to the households. x�3R��2�35W(�*T0P�R0T(�[email protected]��� �[email protected]� �0&��52�342�s�C|L\�� �9; endobj 0000000016 00000 n The circular flow model shows us how households, businesses, and the government interact with one another in the economy. This model gives the students an overview of how households, businesses and government inter-act in different markets by exchanging goods and services, productive resources (also known as … <]>> endobj <> ... 116 videos, downloads and activities ; All … 54 0 obj <> CONOMIC ACTIVITY Prepared by: Alamillo, Yves L. BSAE 2E1. 0000108934 00000 n endstream 0000049910 00000 n endstream �[email protected]� �0& �����c����� k�� /Resources 48 0 R /Filter /FlateDecode /Length 68 >> 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. These goods and services produced can be sold 60 0 obj <> 52 0 obj 30 0 obj stream 34 0 obj /Resources 48 0 R /Filter /FlateDecode /Length 69 >> endobj x�3R��2�35W(�*T0P�R0T(�[email protected]��� 4 0 obj <> The circular flow of economic activity 1. Definition: Circular flow of economic activity is a theory in economics first observed by JM Keynes, which suggests that the money and goods in an economy move in a circle fashion chasing each other indefinitely. endobj stream stream /Resources 48 0 R /Filter /FlateDecode /Length 69 >> �[email protected]� �0&��52�342�s�C|-\�� ��q 65 0 obj endobj x�3R��2�35W(�*T0P�R0T(�[email protected]��� Each of these three parts of the economy are affected by the actions of the others. x�3R��2�35W(�*T0P�R0T(�[email protected]��� x�3R��2�35W(�*T0P�R0T(�[email protected]��� <> �[email protected]� �0& •PRODUCTION Any process that creates value to the already existing goods is called production •CONSUMPTION It means the use of utility of goods & services for the direct … ��d�����v�u�q�X�#wG��8���ֽ��?x�Z��9R����u�����W/� 85r�U/Ո�~�_���g�}�V-�1���o�ݣ�@�sjӵ��Km���юq^B�����g��Ww9. DIAGRAM ARUS KEGIATAN EKONOMI (The Circular Flow Diagram) - Aktivitas ekonomi dalam suatu negara yang melibatkan Rumah Tangga Produksi dan Rumah Tangga Konsumsi digambarkan oleh Francois Quesney (1694-1774) dalam bukunya yang berjudul “Tableua Economique”, yang disebut sebagai “The Circular Flow of Economic Activity” yang artinya arus lingkaran kegiatan ekonomi yang … <> 43 0 obj 564 0 obj <>stream �����c����� k�� Test your knowledge of the subject with this interactive quiz. /Resources 48 0 R /Filter /FlateDecode /Length 68 >> x�b``d``[�����w� ���,[�i�R`>���f�˼@�Fożi_����u�J�������\��� �*�r���az����1��p����M�ǫr���t������sM2^��\sp��5�k�*MO�02)]=��)��F-y����6. stream 3. 0000021111 00000 n 0000049311 00000 n stream endobj 32 0 obj THE CIRCULAR FLOW OF ECONOMIC ACTIVITY INTRODUCTORY MACROECONOMICS By: Cristobal M. Pagoso Rosemary P. Dinio George A. Villasis Prepared by: GREGAR DONAVEN E. VALDEHUEZA, MBA Lourdes College Instructor 2. stream IT IS A CIRCULAR FLOW WITHOUT A BEGINNING OR AN END. <> �[email protected]� �0& It illustrates the balance between injections and leakages in our economy. endobj <> This circulation happens in terms of income in the production process, distribution between the factors of production, and at the end the circulation of the product from household to a firm in the form of consumption expenditure on goods and services manufactured by them. 0000009885 00000 n endstream x�3R��2�35W(�*T0P�R0T(�[email protected]��� 0000039359 00000 n 0000015532 00000 n startxref 12 0 obj �[email protected]� �0& A���)Ê4�����&�&�&�&�&��������T���W⽚oy�FN�*FBBBBBB�(��'��;0���8z�ϲ�i���Z8##!� !� !� !� !� !���D����O]xX��ۚ߁a�(��BBBBBS�yG��t��*7'm}U;��„„„„„”(�b�{��l�ȫ z���*�HaBaBaBaBaBaBak����+r��e������i���&�&�&�&�&�(Q�-?k�c��N��5�n��9w� a��BBBBB�[� ��HaBaBaBaBaBaBaBaBaBaBaBaBaBaB���ϟ�?�c�#da__�~}���������`�z�����Ǐ����+����Ϭ���֫zvW{��G���������+-����_�Zhy�6+����GsX��-��<0��߿� ����ӗ�>_�|@S�/��Çw��}�˗/=��#�h5 <> Read the following description of a day in the life of Andy and Abby Average. 0000015664 00000 n 0000029466 00000 n Here it is. �����ch����� {m 0000027534 00000 n endobj He has over twenty years experience as Head of Economics at leading schools. �[email protected]� �0&��52�342�s�C|M\�� �zl endstream endstream stream stream endstream <> x�3R��2�35W(�*T0P�R0T(�[email protected]��� <> /Resources 48 0 R /Filter /FlateDecode /Length 68 >> endobj Economists create models to illustrate economic activity. ADVERTISEMENTS: Let us make in-depth study of the circular flow of income in two sector, three sector and four sector economy. �[email protected]� �0& <> �����ch����� {_ �[email protected]� �0& Circular flow of economic activities 1. In a closed economy, such as the example to the left, all the spending of households and firms must equal the income received by the factors and We tried to locate some good of Circular Flow Of Economic Activity Worksheet Answers together with Measuring the Health Of the Economy Unit 4 Government Actions image to suit your needs. endobj �����c����� k�� stream x�5�K 44 0 obj x�3R��2�35W(�*T0P�R0T(�[email protected]��� x�3R��2�35W(�*T0P�R0T(�[email protected]��� endobj <> endstream stream 13 0 obj 0000014075 00000 n The circular flow analysis is the basis of national accounts and hence of macroeconomics. endstream endobj This worksheet, when used as an expansion to a course in economics, can be utilized in two ways. <> stream 0000021501 00000 n 0000008626 00000 n �[email protected]� �0& �����ch����� {Q endstream Stable flow c. Circular Flow d. Regular Flow 11. The Circular Flow of Economic Activity 1. For this, we add taxes and government purchases (or expenditure) in our presentation. <> endstream 0000002179 00000 n consumption of fixed capital. 0000044201 00000 n <> endobj Cory earns $15 per hour from … The inflows of money in the financial market are equal to outflows of money. 0000045853 00000 n endstream Businesses provide individuals with … %PDF-1.6 %���� endobj 47 0 obj The circular flow of economic activity is a model showing the basic economic relationships within a market economy. endstream stream stream endobj 0000017501 00000 n He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas. Activity Complete the Circular Flow Model RESERVE BANK OF AUSTRALIA | Education Circular Flow Model • Consumption • Economic resources • Exports (X) • Financial sector • Firms sector • Government expenditure (G) • Government sector • Household sector • Imports (M) • Income • Investment (I) • Output • Overseas sector • Savings (S) • Taxation (T) The flows of money and goods exchanged in a closed circuit correspond in value, but run in the opposite direction. �[email protected]� �0&��52�342�s�C|�\�� �sk x�3R��2�35W(�*T0P�R0T(�[email protected]��� stream endstream <> Between the two are the product market and the resource market. �[email protected]� �0&��52�342�s�C|�\�� �G= /Resources 48 0 R /Filter /FlateDecode /Length 69 >> endobj /Resources 48 0 R /Filter /FlateDecode /Length 69 >> endstream 3.3 Discuss the role of households (consumers) in the economic circular flow model. <> 0000054512 00000 n endobj �����c����� ke� Lesson 10- The Circular Flow of Economic Activity INTRODUCTION Economics The circular flow of economic activityis a sim-plified macroeconomic model of the basic eco-nomic relationships in a market economy. <> endstream <> endobj <> ... Read more endstream The circular flow means the unending flows of production of goods and services, income and expenditure in an economy. 67 0 obj economic activity is unmeasured, such as housework and the underground economy. endstream explain circular flow of economic activities. �[email protected]� �0&��52�342�s�C|�\�� �+9 63 0 obj endobj 0000045327 00000 n The circular flow of income in a four-sector economy is shown in Fig. stream x�3R��2�35W(�*T0P�R0T(�[email protected]��� Households purchase goods and services, which businesses provide through the product … �[email protected]� �0& x�3R��2�35W(�*T0P�R0T(�[email protected]��� A circular flow of income can have a significant influence on the economy. 0000018978 00000 n endobj (4 x 2) (8) [22] QUESTION 4: 6 minutes (Taken from DoE Nov 2010) 4.1 Study the table below and answer the questions that follow. <> (3) 4.1.3 Calculate the compensation of employees as a percentage of GDP at market … 14 0 obj 0000020450 00000 n ... Geoff Riley FRSA has been teaching Economics for over thirty years. �����ch����� {X �����ch����� {C <> 16 0 obj between economic agents. endobj 58 0 obj <> /Resources 48 0 R /Filter /FlateDecode /Length 68 >> endstream x�3R��2�35W(�*T0P�R0T(�[email protected]��� stream �[email protected]� �0&��52�342�s�C|-\�� ��p stream <> <> The circular flow model is an economic model that shows the flow of money through the economy. <> endobj <> The circular flow of income and spending shows connections between different sectors of an economy . The circular flow of economic activities 1. endstream <> �[email protected]� �0& 0000059099 00000 n 10 0 obj �[email protected]� �0& stream endstream Describe the economy’s three main producing sectors 2. x�3R��2�35W(�*T0P�R0T(�[email protected]��� �[email protected]� �0& x�3R��2�35W(�*T0P�R0T(�[email protected]��� 500 65 0000005641 00000 n /Resources 48 0 R /Filter /FlateDecode /Length 69 >> /Resources 48 0 R /Filter /FlateDecode /Length 69 >> �[email protected]� �0& �����ch����� {� <> endstream x�3R��2�35W(�*T0P�R0T(�[email protected]��� endobj �[email protected]� �0&��52�342�s�C|�\�� ��o endobj Circular Flow Infographic Activity . stream <> endobj 57 0 obj <> stream 0000005495 00000 n 0000007244 00000 n x�3R��2�35W(�*T0P�R0T(�[email protected]��� endobj 0000024569 00000 n endobj 0000058625 00000 n <> 0000053775 00000 n Follow the instructions at the end of each paragraph to fill in the economic activity flow chart provided. It was from reliable on … <> endstream 0000111476 00000 n endobj ECONOMICS MODULE - 2 Basic Economic Activities About Economy Notes 46 production is to satisfy our wants. Circular Income Flow in a Two Sector Economy: Real flows of resources, goods and services have been shown in Fig. Each of these ... a recent graduate with a PhD in economics, applies for jobs with the government, universities, and international nonprofits. <> x�3R��2�35W(�*T0P�R0T(�[email protected]��� <> /SMask 71 0 R /Length 2256 >> endstream �����c����� k�� ----- focuses on the behavior of the individual actors on the economic stage , that is, firms and individuals and their interaction in markets. endobj endstream Economic Laboratory- The Circular Flow of Economic Activity Every person living in the United States has several, if not many, roles in the circular flow of the nation’s economic activity. 59 0 obj Discuss all the ways the circular-flow model was altered to incorpo­ rate the government sector and suggest that even more changes would have to be made to the chart if we were to incorpo­ %%EOF a. Macroeconomics b. Microeconomics c. Managerial Economics d. Economics ... Economics includes the following economic activities: a. endstream <> 40 0 obj /Resources 48 0 R /Filter /FlateDecode /Length 69 >> �[email protected]� �0&��52�342�s�C|,\�� �U? THE. endobj �[email protected]� �0& �����c����� k�� �[email protected]� �0& It refers to the … endobj endobj Ans: The circular flow of Income refers to the flow of money, services, and goods, etc. UNIT 2 Macroeconomics LESSON 1 \u0002 ACTIVITY 10 Understanding the Circular Flow of the Macroeconomy Firms provide Economists create models to illustrate economic activity . x�3R��2�35W(�*T0P�R0T(�[email protected]��� x�3R��2�35W(�*T0P�R0T(�[email protected]��� endobj The idea of the … Circular Flow Of Economic Activity Worksheet Answers together with Measuring the Health Of the Economy Unit 4 Government Actions. 4.1.1 Explain the item . endstream endobj x�3R��2�35W(�*T0P�R0T(�[email protected]��� That shows the flow of economic activity 12 you analyze these relationships using Infographic! 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