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what is the differences between the simple and the complex circular flow​

Sagot :

jojoonthebit

Answer:

What is a simple circular flow model?

*What is the difference between the terms endogenous and exogenous?

*What is meant by injections and withdrawals from the circular flow model?

*What are the differences between a simple and a more complex circular flow model?

1. What is a simple circular flow model?

The simple circular flow model is comprised of just the private sector, which includes private

individuals, private households, and private firms. In the lesson below, you will learn how financial

capital (money) and resources (land, labor, capital) flow from households to firms and from firms to

households.

In this lesson on the Circular Flow, you have learned the following concepts:

*What is a simple circular flow model?

*What is the difference between the terms endogenous and exogenous?

*What is meant by injections and withdrawals from the circular flow model?

*What are the differences between a simple and a more complex circular flow model?

2. What is the difference between endogenous and exogenous?

Endogenous means "from within." Exogenous means "from the outside."

So, the lesson above relating to the simple circular flow is endogenous. Everything that was discussed in that

lesson (individuals and firms) is within the model. The lessons below will include exogenous factors that come

from outside the model and affect what is inside the model.

3. Injections and Withdrawals from the Circular Flow

Injections and withdrawals from the Circular Flow are exogenous, meaning they come from outside the circular

flow model. These injections and withdrawals come from government, financial institutions, and foreign trade.

Government can speed up the circular flow of money through an injection (government spending) or slow down

the circular flow of money through a withdrawal (taxes). The lesson below will describe these concepts.

3. Injections and Withdrawals from the Circular Flow

Financial Institutions can speed up the circular flow of money through an injection (lending) or slow down

the circular flow of money through a withdrawal (savings). The lesson below will describe

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