Circular Flow of Income Model Quiz

The circular flow of income is a model of the economy representing the flows of money, goods, and services between economic agents.

The idea of the circular flow was present in the work of Richard Cantillon, and François Quesnay developed and visualized this concept in the Tableau économique.

The circular flow analysis is the basis of national accounts and macroeconomics.

<p>It is a concept for better understanding of the economy as a whole and is used in the National Income and Product Accounts (NIPAs).</p> Signup and view all the answers

<p>In a simple economy, individuals provide labor enabling businesses to produce goods and services, which is represented in a circular flow diagram.</p> Signup and view all the answers