Question

give importance of circular glow of income​

Answer 1

Answer:

The circular flow establishes a link between producers and consumers. It is through income that producers buy the services of the factors of production with which the latter, in turn, purchase goods from the producers.

Explanation:

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Answer 2

Answer:

The firms then spend all of this income on factors of production such as labor, capital and raw materials, "transferring" all of their income to the factor owners (which are households). 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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