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Why is the circular flow model only a theory?
since there will be leakages from the circular flow
What happens when leakages are greater than injections?
if leakages are greater than injection the circular flow will be in disequilibrium because more money is leaving the circular flow
What is the condition for equilibrium in the complete circular flow model?
Leakages = Injections
What are the leakages out of the circular flow of income and output?
The leakage is income received by consumers but not returned to the firms. There are main 3 leakages: savings of consumers ( when consumers save money in banks for using them in the future); imports (when consumers buy products produced by the foreign country, the potential income flows out of the economy's circular flow; thus, this expenditures do not return to the firms);taxes (so that government can pay for health care and education).
What is the role for consumers and producers in a free market system?
A circular flow model
Why is circular flow model only a theory?
since there will be leakages from the circular flow
Why is the circular flow model only a theory?
since there will be leakages from the circular flow
What happens when leakages are greater than injections?
if leakages are greater than injection the circular flow will be in disequilibrium because more money is leaving the circular flow
What is the condition for equilibrium in the complete circular flow model?
Leakages = Injections
What are the leakages out of the circular flow of income and output?
The leakage is income received by consumers but not returned to the firms. There are main 3 leakages: savings of consumers ( when consumers save money in banks for using them in the future); imports (when consumers buy products produced by the foreign country, the potential income flows out of the economy's circular flow; thus, this expenditures do not return to the firms);taxes (so that government can pay for health care and education).
What is the difference between leakages and injections?
Leakages refer to money flowing out of the circular flow of income, such as savings, taxes, and imports, which reduce the total spending in the economy. Injections, on the other hand, refer to money flowing into the circular flow of income, such as investment, government spending, and exports, which add to the total spending in the economy. Together, leakages and injections help maintain equilibrium in the economy.
What are the leakages of circular flow of income and expenditure in the south African economy?
In the South African economy, leakages from the circular flow of income and expenditure include savings, taxes, and imports. Savings reduce the amount of money circulating in the economy because they are not immediately spent on goods and services. Taxes divert income away from consumers and businesses, limiting their spending capacity. Additionally, imports represent money leaving the economy, as expenditure on foreign goods does not contribute to local production and income generation.
What is the role for consumers and producers in a free market system?
A circular flow model
What does circular flow mean?
Circular flow means the pattern in which goods,services,and resources flow in the marketplace.
Draw a circular flow model of economics?
Draw and explain circular flow model
What is Circular flow of income model withdrawal from the circular flow?
Taxation Imports Savings
The circular flow model of a mixed economy shows .?
what does a circular model of a mixed economy show
