2.2.4 Aggregate demand and the level of economic activity
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Circular flow, injections and leakages

Circular flow, injections and leakages

Circular flow of income in an open economy showing households, firms, government, financial institutions, overseas sector, and injections and leakages

The circular flow shows that households and firms are linked by income and spending. Households supply factors of production to firms, receive factor incomes, and then spend that income on goods and services.

2.2.4 Aggregate demand and the level of economic activity Lesson

  1. A Level
  2. /Economics
  3. /2.2.4 Aggregate demand and the level of economic activity