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What is meant by the circular flow of income?

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posted Aug 9 by Abu Anam

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The circular flow of income is a neoclassical economic model depicting how money flows through the economy. In the most simple version, the economy is modeled as consisting only of households and firms. Money flows to workers in the form of wages, and money flows back to firms in exchange for products. This simplistic model suggests the old economic adage, "Supply creates its own demand."

answer Aug 11 by Pratiksha Shetty
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