Question

Differentiate between Real flow and Money flow in tabular form.Cite some examples.

Answer 1

Money flow and real flow are the two main aspects of the circular flow of income economic model. Both refer to exchanges of goods and services for money, but the two concepts differ in how they refer to the opposite sides of these exchanges as they relate to individuals and companies. Real flows refer to the flow of the actual goods or services, while money flows refer to the payments for the services (wages, for example) or consumption payments.

In a modern exchange economy, one in which all economic exchanges involve money, the circular flow of income model attempts to depict the back and forth flows of money and services between individuals (or households) and companies. In explaining the flow of money, this economic model uses the terms "money flow" and "real flow" to designate the nature of the different exchanges that take place. Within the model, individuals are considered to be both the possessors of factors of production (such as labor, services or property) and as consumers, the purchasers of goods. Companies are considered to be both the producers of goods and the purchasers of factors of production.


HOPE IT'S HELP YOU !

Answer 2

Money flow and real flow are the two principal perspectives of the circular flow of income economic model. Both transfers to exchanges of goods and services for money, but the two theories contrast in how they apply to the opposite surfaces of these changes as they compare to somebody and corporations. Real flows lead to the issue of the original assets or services, while money flows apply to the payments for assistance such as wages, or expenditure reimbursements.

Real Flows Versus Money Flows

Real flows incorporate the circumstances of composition, such as work or land, that progress from individuals to corporations, as well as the movement of goods and services from corporations to people.

Meantime, money flows happen when corporations pay wages in income for labor or assistance furnished by people, as well as when people spend capital to purchase goods or assistance provided by organizations.