27 0 obj �z@� �0&��52�342�s�C|-\�� ��p <> These activities are represented by the green lines in the diagram. Because of these transactions, income and expenditure move in circular form. 3 0 obj endobj 54 0 obj <> endobj endobj This activity will help you analyze these relationships using the infographic poster that accompanies it. endstream THE CIRCULAR FLOW OF ECONOMIC ACTIVITIESThere are two basic activities undertaken in any economy: PRODUCTION AND CONSUMPTION.FIRMS – they perform the production function or the basic producing units.HOUSEHOLDS – undertake consumptionor the basic consuming units.To be able to produce, … /Resources 48 0 R /Filter /FlateDecode /Length 69 >> 0000021328 00000 n endstream 67 0 obj �0D�=�\�ش��V���P� Aĕ�7ZL�-�g0(M��V40n�]�I60i��c��bX�a5���Җa2�BX���\�9"Y�=r멈����)qM The circular flow model is a diagram illustrating the flow of spending and income in an economy. endstream stream endstream The circular flow analysis is the basis of national accounts and hence of macroeconomics. The term circular flow of income or circular flow of economic activity refers to “a simple economic model which describes the circulation/flow of income between producers and consumers”.• In the circular flow model, producer and consumer are referred to as "firms" and "households" respectively. endobj In a closed economy, such as the example to the left, all the spending of households and firms must equal the income received by the factors and 0000023379 00000 n Each of these three parts of the economy are affected by the actions of the others. �z@� �0&��52�342�s�C|-\�� ��q endobj 62 0 obj 0000057708 00000 n x�3R��2�35W(�*T0P�R0T(�Y@��� stream ... Geoff Riley FRSA has been teaching Economics for over thirty years. x�b``d``[�����w� ���,[�i�R`>���f�˼@�Fożi_����u�J�������\��� �*�r���az����1��p����M�ǫr���t������sM2^��\sp��5�k�*MO�02)]=��)��F-y����6. x�3R��2�35W(�*T0P�R0T(�Y@��� In this simple economy, individuals provide the labor that enables businesses to produce goods and services. endstream 500 65 0000005726 00000 n 64 0 obj endobj /Resources 48 0 R /Filter /FlateDecode /Length 68 >> It illustrates the balance between injections and leakages in our economy. The circular flow of income in a four-sector economy is shown in Fig. Describe the economy’s three main producing sectors 2. 59 0 obj stream endobj endobj endobj �z@� �0&��52�342�s�C|�\�� ��n 42 0 obj endobj Circular Flow Of Economic Activity Worksheet Answers together with Measuring the Health Of the Economy Unit 4 Government Actions. <> �����c����� ke� 12 0 obj 0000021501 00000 n endobj �����c����� kz� endobj Read the following description of a day in the life of Andy and Abby Average. 56 0 obj �z@� �0&��52�342�s�C|�\�� �N> consumption of fixed capital. �z@� �0& 0000027534 00000 n <> ��d�����v�u�q�X�#wG��8���ֽ��?x�Z��9R����u�����W/� 85r�U/Ո�~�_���g�}�V-�1���o�ݣ�@�sjӵ��Km���юq^B�����g��Ww9. x�3R��2�35W(�*T0P�R0T(�Y@��� endobj stream 17 0 obj 0000001596 00000 n /XObject <> stream The goal of. 4.1.1 Explain the item . <> between economic agents. UNIT 2 Macroeconomics LESSON 1 \u0002 ACTIVITY 10 Understanding the Circular Flow of the Macroeconomy Firms provide /Resources 48 0 R /Filter /FlateDecode /Length 69 >> stream To this we add the government sector so as to make it a three-sector closed model of circular flow of economic activity. 38 0 obj x�3R��2�35W(�*T0P�R0T(�Y@��� endstream The circular flow model shows us how households, businesses, and the government interact with one another in the economy. stream 0000058625 00000 n <> x�3R��2�35W(�*T0P�R0T(�Y@��� x�3R��2�35W(�*T0P�R0T(�Y@��� x�3R��2�35W(�*T0P�R0T(�Y@��� endstream endobj 6.1. �z@� �0& Basic Economic Activities Production • The use of economic resources in the creation of goods and services for the … x��„„„„��rE�f�y������B˯xf�$ޛ`$�0!�0!�0!�0!�0!���L�=e����t�����������i֊u�W�e$�0!�0!�0!�0!�0!�0!���� �_ߴ���%�����M�Q|[~���{[�uOFBBBBBB[K�b�a������k��5���� �a$�0!�0!�0!�0!�0!����(F�����;٫x5bC�� !L!L!L!L!L!�o����3���@��c�~���6T�x1#!� !� !� !� !� !�J�� �gi��:N��_�1��„„„„„��r��N��t��U��W��K������\���„„„„��R���邃��WQt2�N��_u��y !L!L!L!L!L!L!l-�lkv�a��osʆ��=�d�~��„„„„„��R��y!L� The clockwise arrows represent the flow of goods and services. endstream endstream <> x�3R��2�35W(�*T0P�R0T(�Y@��� endobj <> In carrying out these economic activities, people make transactions between different sectors of the economy. x�3R��2�35W(�*T0P�R0T(�Y@��� <> Economists create models to illustrate economic activity. stream %PDF-1.6 <> �����ch����� {t startxref �z@� �0& stream /Resources 48 0 R /Filter /FlateDecode /Length 68 >> <> 0000014160 00000 n �z@� �0& x�3R��2�35W(�*T0P�R0T(�Y@��� 65 0 obj stream The circular flow of income or circular flow is a model of the economy in which the major exchanges are represented as flows of money, goods and services, etc. 4 0 obj x�3R��2�35W(�*T0P�R0T(�Y@��� 0000017586 00000 n �z@� �0&��52�342�s�C|L\�� �@< <> Economic Laboratory- The Circular Flow of Economic Activity Every person living in the United States has several, if not many, roles in the circular flow of the nation’s economic activity. endobj 0000015532 00000 n He has over twenty years experience as Head of Economics at leading schools. Show how important the three main producing sectors in economy in making a choice of what business to establish To further guide the students on how the market works, this section describes the various economic activities that take place in an economy. <> 33 0 obj 3.3 Discuss the role of households (consumers) in the economic circular flow model. 30 0 obj <> Therefore, GDP is an imperfect indicator of living standards. • In equilibrium, planned spending must equal actual spending in the economy. endobj /Resources 48 0 R /Filter /FlateDecode /Length 69 >> <> 15 0 obj This worksheet, when used as an expansion to a course in economics, can be utilized in two ways. 29 0 obj x���aZ�J`�6��D\��e%�Jԕ(+�{/�:==���t�I���6�m'�K2�@�����N!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!L!���h��������Ѯ.s�7;���O���6�����„„„„„�%��|�ՁN��;��!#+7Gm}oy1#!� !� !� !� !� !���D��/�{�a?�W=��:0_��e��6�����„„„„„„�� _ҁlMr�ͅ-���G��HaBaBaBaBaBaJ'/9��|�i�(� !L!L!L!L!L!l-%�xF�Xm�:U:�r���g�R��7J!L!L!L!L!,P���tŰ�8���l:�WqJ�� !� !� !� !� !��-Ql�+�~����}FBBBBBB�䍞��a�Ȯ.ls��z �=�%�&�&�&�&���=u� ���9�����IR�v !L!L!L!L!L!L!l�u�uNߣL�i��FNS3����Ջ !L!L!L!L!L!l-%��wŚ���^��+~-�Bov�#!� !� !� !� !� !�mrB��ۚo�u*����g����8��32B�B�B�B�B�B�ZJ'nk�N:����U~�e$�0!�0!�0!�0!�0!���%���s�}�������u�j�a�L5k. Businesses provide individuals with … >> endstream endstream 40 0 obj Test your knowledge of the subject with this interactive quiz. x�3R��2�35W(�*T0P�R0T(�Y@��� x�3R��2�35W(�*T0P�R0T(�Y@��� x�3R��2�35W(�*T0P�R0T(�Y@��� �����c����� k�� endobj 35 0 obj 0000110208 00000 n x�3R��2�35W(�*T0P�R0T(�Y@��� 5 0 obj �����ch����� {m <> CIRCULAR FLOW OF. 0000056668 00000 n Lesson 10- The Circular Flow of Economic Activity INTRODUCTION Economics The circular flow of economic activityis a sim-plified macroeconomic model of the basic eco-nomic relationships in a market economy. �z@� �0&��52�342�s�C|�\�� �sk 0000032689 00000 n endstream 18 0 obj stream 0000035905 00000 n endobj 0000003060 00000 n �z@� �0&��52�342�s�C|�\�� �G= 0000017501 00000 n /Resources 48 0 R /Filter /FlateDecode /Length 68 >> The circular flow of income and spending shows connections between different sectors of an economy . 0000044201 00000 n 39 0 obj 0000012890 00000 n stream endstream <> For this, we add taxes and government purchases (or expenditure) in our presentation. Activity Complete the Circular Flow Model RESERVE BANK OF AUSTRALIA | Education Circular Flow Model • Consumption • Economic resources • Exports (X) • Financial sector • Firms sector • Government expenditure (G) • Government sector • Household sector • Imports (M) • Income • Investment (I) • Output • Overseas sector • Savings (S) • Taxation (T) endobj 25 0 obj endstream endobj <> stream (4 x 2) (8) [22] QUESTION 4: 6 minutes (Taken from DoE Nov 2010) 4.1 Study the table below and answer the questions that follow. stream trailer <> x�3R��2�35W(�*T0P�R0T(�Y@��� 6.1 PRODUCTION In the last lesson you have read about scarcity of resources and making choice. x�3R��2�35W(�*T0P�R0T(�Y@��� <> The flows of money and goods exchanged in a closed circuit correspond in value, but run in the opposite direction. endobj endstream endstream �z@� �0& 0000054512 00000 n <> <> �z@� �0&��52�342�s�C|M\�� ��m 51 0 obj <> Between the two are the product market and the resource market. 7 0 obj This circulation happens in terms of income in the production process, distribution between the factors of production, and at the end the circulation of the product from household to a firm in the form of consumption expenditure on goods and services manufactured by them. endstream endobj LESSON 10 THE CIRCU AR FLOW OF ECONOMIC ACTIVITY 12. endobj <> <> �����ch����� {X <> 0000011454 00000 n It was from reliable on … endobj endobj THE CIRCULAR FLOW OF ECONOMIC ACTIVITY Stock and Flow Concepts The Circular Flow of Goods, Services, and Income The Production Process The Flow of Goods Among Producing Firms Goods and Income Flow Among Households and Various Types of Producers Income Flow The Concept of Equilibrium The … 2. 0000047787 00000 n Cory earns $15 per hour from … These goods and services produced can be sold endstream 0000034257 00000 n stream �z@� �0& 0000020450 00000 n x�3R��2�35W(�*T0P�R0T(�Y@��� 0000005606 00000 n • However, year on year changes in GDP are a good indicator of the state of the business cycle. <> /Resources 48 0 R /Filter /FlateDecode /Length 68 >> 0000007244 00000 n Thus, one of the important conditions for the economy to be in equilibrium is that its circular flow of economic activities among the different sectors of the economy must be maintained, i.e., whatever is earned in the form of income (10 by the factors of production must be spent by them either on consumption (C) or on investment (I), so that in the ultimate .analysis, theoretically at least, Y – C + I … Follow the instructions at the end of each paragraph to fill in the economic activity flow chart provided. �z@� �0&��52�342�s�C| \�� �^h 49 0 obj endobj 11 0 obj endstream endstream <> The circular flow of economic activities 1. endobj �����ch����� {f 22 0 obj /Resources 48 0 R /Filter /FlateDecode /Length 69 >> �z@� �0& endobj 0000026087 00000 n Worksheet December 19, 2017. endobj x�3R��2�35W(�*T0P�R0T(�Y@��� A���)Ê4�����&�&�&�&�&��������T���W⽚oy�FN�*FBBBBBB�(��'��;0���8z�ϲ�i���Z8##!� !� !� !� !� !���D����O]xX��ۚ߁a�(��BBBBBS�yG��t��*7'm}U;��„„„„„”(�b�{��l�ȫ z���*�HaBaBaBaBaBaBak����+r��e������i���&�&�&�&�&�(Q�-?k�c��N��5�n��9w� a��BBBBB�[� ��HaBaBaBaBaBaBaBaBaBaBaBaBaBaB���ϟ�?�c�#da__�~}���������`�z�����Ǐ����+����Ϭ���֫zvW{��G���������+-����_�Zhy�6+����GsX��-��<0��߿� ����ӗ�>_�|@S�/��Çw��}�˗/=��#�h5 Here it is. 34 0 obj 31 0 obj CONOMIC ACTIVITY Prepared by: Alamillo, Yves L. BSAE 2E1. 0000111476 00000 n 0000050653 00000 n 63 0 obj x�3R��2�35W(�*T0P�R0T(�Y@��� Circular Flow Infographic Activity (Answer Key) Economists create models to illustrate economic activity. %PDF-1.6 %���� /Resources 48 0 R /Filter /FlateDecode /Length 69 >> 0000052688 00000 n This activity will help you … endobj /Resources 48 0 R /Filter /FlateDecode /Length 68 >> x�3R��2�35W(�*T0P�R0T(�Y@��� 70 0 obj �z@� �0&��52�342�s�C|\�� �7 45 0 obj x�3R��2�35W(�*T0P�R0T(�Y@��� 0000014048 00000 n endobj <> 20 0 obj <> �����ch����� {C 564 0 obj <>stream stream endobj stream 0000049910 00000 n �z@� �0& THE CIRCULAR FLOW OF ECONOMIC ACTIVITY 2. <> stream endstream <> 0000049311 00000 n 52 0 obj endobj <> •PRODUCTION Any process that creates value to the already existing goods is called production •CONSUMPTION It means the use of utility of goods & services for the direct … explain circular flow of economic activities. <> Figure 3-1: The Circular Flow by The Bureau of Economic Analysis is licensed under Public Domain. �����c����� k�� x�3R��2�35W(�*T0P�R0T(�Y@��� /Resources 48 0 R /Filter /FlateDecode /Length 69 >> 0 <> �z@� �0&��52�342�s�C| \�� �ei a. Macroeconomics b. Microeconomics c. Managerial Economics d. Economics ... Economics includes the following economic activities: a. 10 0 obj It refers to the … endstream x�3R��2�35W(�*T0P�R0T(�Y@��� stream <> x�3R��2�35W(�*T0P�R0T(�Y@��� /Resources 48 0 R /Filter /FlateDecode /Length 68 >> Project Visual 10.2, and ask the students to compare this diagram with the diagram on Activity 10.5. The inflows of money in the financial market are equal to outflows of money. stream endobj endstream x�3R��2�35W(�*T0P�R0T(�Y@��� 0000021111 00000 n Circular Income Flow in a Two Sector Economy: Real flows of resources, goods and services have been shown in Fig. �z@� �0& Stable flow c. Circular Flow d. Regular Flow 11. 0000053775 00000 n 1.7. x�3R��2�35W(�*T0P�R0T(�Y@��� 0000002293 00000 n x�3R��2�35W(�*T0P�R0T(�Y@��� 0000017457 00000 n This model gives the students an overview of how households, businesses and government inter-act in different markets by exchanging goods and services, productive resources (also known as … economic activity is unmeasured, such as housework and the underground economy. endobj 0000029933 00000 n He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas. 19 0 obj The Circular Flow of Economic Activity 1. Households purchase goods and services, which businesses provide through the product … 28 0 obj stream ... 116 videos, downloads and activities ; All … Consumption c. Exchange d. All of the above 53. 58 0 obj x�3R��2�35W(�*T0P�R0T(�Y@��� x�3R��2�35W(�*T0P�R0T(�Y@��� endobj ECONOMICS MODULE - 2 Basic Economic Activities About Economy Notes 46 production is to satisfy our wants. endobj 24 0 obj 13 0 obj <> �����ch����� {_ Circular Flow Infographic Activity . 6 0 obj x�3R��2�35W(�*T0P�R0T(�Y@��� 0000030657 00000 n IT IS A CIRCULAR FLOW WITHOUT A BEGINNING OR AN END. <> <> �����cd����� {K �����ch����� {{ �����c����� k�� �z@� �0&��52�342�s�C|�\�� �lj endobj stream 0000055712 00000 n 0000110844 00000 n 0000045327 00000 n �����c����� k�� endstream The circular flow of economic activity is a model showing the basic economic relationships within a market economy. �z@� �0& Definition: Circular flow of economic activity is a theory in economics first observed by JM Keynes, which suggests that the money and goods in an economy move in a circle fashion chasing each other indefinitely. endobj subsidies on products. <> �z@� �0& Circular flow of economic activities 1. endobj �z@� �0&��52�342�s�C|L\�� �9; endobj stream �z@� �0& 50 0 obj 21 0 obj %%EOF Production b. �����ch����� {� �z@� �0&��52�342�s�C|�\�� �+9 endobj <> <> �z@� �0& <> <> 1 0 obj 0000018978 00000 n 0000107073 00000 n 0000045853 00000 n endobj Discuss all the ways the circular-flow model was altered to incorpo­ rate the government sector and suggest that even more changes would have to be made to the chart if we were to incorpo­ 0000029466 00000 n �z@� �0&��52�342�s�C|�\�� �2: 0000029052 00000 n <> endobj endobj x�3R��2�35W(�*T0P�R0T(�Y@��� endobj �z@� �0& endstream 0000108934 00000 n 0000005641 00000 n endstream /Resources 48 0 R /Filter /FlateDecode /Length 69 >> endobj /Resources 48 0 R /Filter /FlateDecode /Length 69 >> The idea of the … 44 0 obj stream endstream stream endobj endobj The most common form of this model shows the circular flow of income between the household sector and the business sector. 0000059099 00000 n stream /Resources 48 0 R /Filter /FlateDecode /Length 68 >> 60 0 obj �����c����� ks� 8 0 obj endobj /SMask 71 0 R /Length 2256 >> It makes the circular flow of income complete and continuous. endstream (3) 4.1.3 Calculate the compensation of employees as a percentage of GDP at market … A circular flow of income can have a significant influence on the economy. endstream 0000014075 00000 n stream Each of these ... a recent graduate with a PhD in economics, applies for jobs with the government, universities, and international nonprofits. The circular flow of economic activity worksheet is available as an add-on to almost any book on economics. stream endobj x�3R��2�35W(�*T0P�R0T(�Y@��� “Unit 1.4 The Circular Flow Diagram (Activity)” What is Circular Flow of Income? <> endstream CIRCULAR FLOW OF ECONOMIC ACTIVITIES THE FLOW OF PRODUCTION, INCOME, & EXPENDITURE NEVER STOPS . 55 0 obj stream endobj 0000039359 00000 n Economists create models to illustrate economic activity . endstream <> In the upper loop of this figure, the resources such as land, capital […] endstream 53 0 obj stream endstream It shows the redistribution of income in a circular manner between the production unit (firms) and households. endstream 32 0 obj /Resources 48 0 R /Filter /FlateDecode /Length 69 >> 0000004339 00000 n 0000009885 00000 n <> stream ADVERTISEMENTS: Let us make in-depth study of the circular flow of income in two sector, three sector and four sector economy. The circular flow model is an economic model that shows the flow of money through the economy. /Resources 48 0 R /Filter /FlateDecode /Length 68 >> endobj endobj endstream endstream endstream endobj <> 3. <> 0000008626 00000 n 0000015664 00000 n stream endstream 47 0 obj 23 0 obj /Resources 48 0 R /Filter /FlateDecode /Length 68 >> 66 0 obj 0000024569 00000 n <> 43 0 obj endobj Circular Flow Concepts Product Market – where goods and services are exchanged Households – suppliers of the factors of production & demanders of goods and services Government – providers of public goods and services & demanders of both private goods and services and the factors of … <> endobj endstream ... Read more 0000053145 00000 n �z@� �0& 0000002179 00000 n x�3R��2�35W(�*T0P�R0T(�Y@��� stream Lesson 3.5 The Circular Flow of Economic Activity Objectives: 1. The circular flow means the unending flows of production of goods and services, income and expenditure in an economy. stream �z@� �0& 500 0 obj <> endobj x�5�K View ECON - Circular Flow Activity (1).pdf from ECON 101 at Dr. Phillips High School. <> �z@� �0&��52�342�s�C|,\�� �\@ THE CIRCULAR FLOW OF ECONOMIC ACTIVITY INTRODUCTORY MACROECONOMICS By: Cristobal M. Pagoso Rosemary P. Dinio George A. Villasis Prepared by: GREGAR DONAVEN E. VALDEHUEZA, MBA Lourdes College Instructor 2. endstream <> 0000000016 00000 n <> <> ----- focuses on the behavior of the individual actors on the economic stage , that is, firms and individuals and their interaction in markets. x�3R��2�35W(�*T0P�R0T(�Y@��� �z@� �0& stream 0000016820 00000 n 14 0 obj �z@� �0& 24.5 CIRCULAR FLOW OF INCOME Accounting Production, consumption and investment are important economic activities of an economy. x�3R��2�35W(�*T0P�R0T(�Y@��� stream endobj 0000109571 00000 n <]>> stream stream <> /Resources 48 0 R /Filter /FlateDecode /Length 68 >> <> 46 0 obj �����ch����� {J endobj stream 37 0 obj 61 0 obj �z@� �0&��52�342�s�C|�\�� ��o �z@� �0& xref Ans: The circular flow of Income refers to the flow of money, services, and goods, etc. Financial market invests money by lending out money to households, firms and the government. stream �����c����� k�� <> (3) 4.1.2 Explain the item . 0000004226 00000 n 0000032182 00000 n <> <> /Resources 46 0 R /Filter /FlateDecode /Length 111 >> endobj The counterclockwise arrows represent the flow of money. 41 0 obj <> �z@� �0&��52�342�s�C|,\�� �U? 36 0 obj The Circular Flow in a Three-Sector Economy: So far we have been working on the circular flow of a two-sector model of an economy. x�3R��2�35W(�*T0P�R0T(�Y@��� �z@� �0& The circular flow of economic activity 1. /Resources 48 0 R /Filter /FlateDecode /Length 69 >> 57 0 obj stream The circular flow model shows us how households, businesses, and the government interact with one another in the economy. endstream 6 8. �z@� �0& �����c����� kl� <> In other words, the theory suggests that money and goods from households go to businesses and then back to the households. x�3R��2�35W(�*T0P�R0T(�Y@��� �z@� �0&��52�342�s�C|M\�� �zl We tried to locate some good of Circular Flow Of Economic Activity Worksheet Answers together with Measuring the Health Of the Economy Unit 4 Government Actions image to suit your needs. 9 0 obj <> This is referred to as the … DIAGRAM ARUS KEGIATAN EKONOMI (The Circular Flow Diagram) - Aktivitas ekonomi dalam suatu negara yang melibatkan Rumah Tangga Produksi dan Rumah Tangga Konsumsi digambarkan oleh Francois Quesney (1694-1774) dalam bukunya yang berjudul “Tableua Economique”, yang disebut sebagai “The Circular Flow of Economic Activity” yang artinya arus lingkaran kegiatan ekonomi yang … �z@� �0&��52�342�s�C|\�� �$8 �����c����� k�� THE. 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