Question

the circular flow of national income detail answers required​

Answer 1

Answer:

The circular flow model demonstrates how money moves through society. Money flows from producers to workers as wages and flows back to producers as payment for products. In short, an economy is an endless circular flow of money. For that reason, the model is also referred to as the circular flow of income model.

There are two types of circular flow.

Real Flow- The term real flow means the flow of factor services from household to firms. Similarly, the flow of goods and services from firms to household.

Money Flow- The Money flow refers to the flow of factor payments from firm to household for factor services.