| Question | 1. Briefly discuss the money flow and the real flow of income . (Long Question) |
| Class | Class 12 |
| Subject | Economics (Macroeconomics) |
| Category | Class 12 Economics Solutions Sandeep Garg |
Sandeep Garg Macroeconomics Class 12 Solutions Circular flow of Income – Long Questions
1. Briefly discuss the money flow and the real flow of income.
Solution:-
Real Flow:-
Real Flow refers to the flow of factor services from household to firms and flow of goods and services from firms to households. No money is involved in this flow. It is also known as Physical Flow. This flow determines the magnitude of growth process in economy.
Money Flow:-
Money Flow refers to the flow of factor payments to household by firms and flow of consumption expenditure from household to the firms. It is also known as NOMINAL FLOW. It involves exchange of money.
Long Questions – Sandeep Garg Macroeconomics Class 12 Solutions Circular Flow of Income
- Briefly discuss the money flow and the real flow of income.
- Describe the circular flow of income in a two-sector economy (without financial market).