Principles of Macroeconomics / Unit 3 MAC 0212 short lesson, about 20 seconds
The Expanded Circular Flow
Captions available
The idea
Unit one's circular flow had households and firms alone. The full version adds government, which taxes and buys, and the rest of the world, which buys exports and sells imports.
In practice
Each addition is another spender placing demand on firms and another source of income.
Where people slip
Taxes, saving and imports leak out of the flow; government purchases, investment and exports inject back in.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
Unlocks
- Nothing yet depends on this.
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