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(2) CircularFlow

(2) CircularFlow

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Published by Johar Menezes

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Categories:Types, Business/Law
Published by: Johar Menezes on Dec 02, 2010
Copyright:Attribution Non-commercial

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10/12/2013

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1
Circular Flow of Income
 
2
P
rocess of Income Generation and Circular Flow of Income
Firms:Factor Users and ProducersHousehold:Factor Owners and Customers
Factor Incomes = Wages + Interest + Rent+
P
rofits = Factor 
P
rices
FOP: Labour, Capital, Land, OrganizationGoods and Services
P
ayments for Goods and Services = Value of Output
 
3
Circular Flow of Income in an Open Economy
Financial InstitutionsGovernmentHouseholdsFirmsRest of the World
Government Savings(+ve or ±ve)
1311
P
ersonal Savings
FO
P
7
P
ersonal TaxNDI + T
P
89
HDT
10
P
rivate Consumption
6
[Rents+Wages+Interest+
P
rofit]
12
Govt. Exp.
3
Subsidy
2
Indirect Tax
4
Corporate Tax
1
Deposits
5
Repayments
14
Investments
15
Receipts for exports (X)
16
P
ayments for imports (M)
Footnotes:
1.FOP : Factors of Production2.GNP: Gross National Product3.NDI : National Debt Interest of domestic debt4.TP : Transfer Payments5.HDT: Household Direct Tax
GN
P

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