What is meant by the circular flow of income?
Distinguish between Real Flow and Money Flow.

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Solution

Real Flow
Money flow
It refers to the flow of goods and services across different sectors of the economy. It refers to the flow of money in terms of receipts and payments across different sectors of the economy.
Circular flow of income: It refers to unbroken circularity of real flows and money flows across different sectors of the economy

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Real Flow	Money flow
It refers to the flow of goods and services across different sectors of the economy.	It refers to the flow of money in terms of receipts and payments across different sectors of the economy.