The Circular Flow
The Circular Flow
The circular flow shows income moving between households and firms as resources, goods, services and payments are exchanged. Households receive income from firms and use some of it to buy domestically produced goods and services.
Injections add spending on domestic output from outside household consumption. Investment (III), government spending (GGG) and exports (XXX) enter the flow as expenditure on the output of domestic firms.
Step-by-step lessons on Edexcel A A Level Economics 2.4.2 Injections and withdrawals. Each one builds up to exam-style questions. Start with the core supply-and-demand models before moving on to the more evaluation-heavy macroeconomic policy topics.