Question

Illustrate the circular flow of income in a two sector model economy.( including the real flow and money flow)?​

Answer 1

Answer:

According to circular flow of income in a two-sector economy, there are only two sectors of the economy, i.e., household sector and business sector. Government does not exist at all, therefore, there is no public expenditure, no taxes, no subsidies, no social security contribution, etc.

Explanation: