Notes>Macroeconomics>2.1 Economic activity

2.1: The level of overall economic activity

Definitions   Macroeconomics is the study of aggregate economic activity. It investigates how an economy as a whole works. Circular flow of income is a simplified model that shows the flow of money through the economy. Leakages are income received but not used for...

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The circular flow of income model

 The circular flow of income model In a closed economy with no government the households buy the nation’s output of goods and services and are owners of all the economy’s factors of production. They supply these factors of production to the firms and receive payment...

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