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What is circular flow of income …

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What is circular flow of income under two sector economy

Posted by Arpita Sen 2 years, 3 months ago

CBSE > Class 12 > Economics

4 answers

Khushi Vajpayee 2 years, 1 month ago

It refers to a cycle of generation of income, it's distribution among the factors of production from firms to household and finally it's circulation from household to firm in the form of consumption, expenditure on the goods and services produced by them

Piyali Tirkey 2 years, 1 month ago

In circular flow of income initially the household sector provide factor service in term of land ,labour,etc to the producer sector and in turn factor payments is made by the the producer sector like wafe ,rent,to the household sector .after the complete production final consumption is made by the household sector and factor payment is made by the household sector to the producer sector.

Tanisha Soni 2 years, 3 months ago

Flow of money , goods and services across different sectors of the economy

Priyansh Agarwal 2 years, 3 months ago

According to circular flow of income in a two-sector economy, there are only two sectors of the economy, i.e., household sector and business sector. Government does not exist at all, therefore, there is no public expenditure, no taxes, no subsidies, no social security contribution, etc. The economy is a closed one, having no international trade relations.

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