Question

Explain briefly 3 phases of Circular flow of Income​

Answer 1

Phases of Circular Flow of Income There are three different phases (generation, distribution and disposition) in circular flow of income, as shown in the given diagram: ...

(i) Production phase In this phase, firms produce goods and services with the help of factor services.

Answer 2

Answer:Circular Flow of income refers to the continuous circular production, income generation and expenditure. There are three phases of circular flow. They are:

⭐PRODUCTION PHASE:in this phase firms produce goods and service with the help of factor services.

⭐INCOME PHASE:this phase involves the flow of income from firms to households.

⭐EXPENDITURE PHASE :the income received by factors of production is spent on goods and services produced by firms.

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