Circular flow models start in a two-sector model with the household sector that engages in consumption spending (C). Households contribute to an economy by working, giving away time and labor ...

International capital flows from rich to poor countries can be regarded as either too low (the Lucas paradox in a one-sector model) or too high (when compared with the logic of factor price ...

Each sector within a circular flow model may be designated with a capital letter often used to describe how to calculate GDP. In a two-sector model, circular flow models start with the household ...