explain the two sector circular flow model with financial system
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In the basic two-sector circular flow of income model, the economy consists of two sectors: (1) households and (2) firms. ... The factor owners (households), in turn, spend all of their income on goods, which leads to a circular flow of income.
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1
Answer:
In the basic two-sector circular flow of income model, the economy consists of two sectors: (1) households and (2) firms. ... The factor owners (households), in turn, spend all of their income on goods, which leads to a circular flow of income.
Explanation:
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