What is the Circular flow of Income?

• What is the Circular flow of Income?:

  • The circular flow of income and spending shows connections between different sectors of an economy
• What is the Circular flow of Income?:

  • It shows flows of goods and services and factors of production between firms and households
• What is the Circular flow of Income?:

  • Business produce goods and services and in the process of doing so, incomes are generated