Question

What is circular flow of income? And explain its two principles.

Answer 1

The circular flow of income involves two basic principles:

(ii) Goods and services flow in one direction and the money payment to acquire them, flow in the return direction giving rise to a circular flow.

Answer 2

Explanation:

The circular flow of income involves two basic principles:

(ii) Goods and services flow in one direction and the money payment to acquire them, flow in the return direction giving rise to a circular flow.