Question

What Are the Types of Circular Flow of Income?

Answer 1

Circular flow of income are of the following types:

1. Circular flow of income in a two sector economy
2. Circular flow of income in a two sector economy (with introduction of capital market)
3. Circular flow of income in a three sector economy (addition of government)
4. Circular flow of income in a four sector economy (addition of external sector)

Also read: Circular Flow of Income and Methods of Calculating National Income

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