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Circular Flow real Life Application

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by

kerim erkan

on 13 November 2016

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Transcript of Circular Flow real Life Application

Production factors
productive
resources
Goods
Services
Goods
Services
ECONOMICS CIRCULAR FLOW
REAL LIFE EXAMPLE

One of the biggest "b2B"
travel and tourism companies
in the world
How does the company function?
sample.
Buy Hotel rooms
Sell Hotel rooms
The more circulation, the more
economic growth.
Buy Hotel rooms
Sell Hotel rooms
Here is how the money flows.
Rooms for money
here is the catch
The money is payed a week after the purchase
hotels for money
The money is payed 5 days
after the purchase
The issue faced
When Met-global wants to pay back the hotel
chains, they don't have enough money!

Yet the sale graphs show that that there
should be enough money!

This caused a shrink in the
company's2016 economic growth
graph

My Father found the crack
Buy Hotel rooms
Sell Hotel rooms
Individuals were looking at how much they sell, not the time restrictions for payments.
Other companies were not being stopped by any force, causing them to delay their payments every time.
BANK
Company 1
Company 2
Production factors
productive
resources
Goods
Services
Goods
Services
Production factors
productive
resources
Goods
Services
Goods
Services
Company 1
200K
400k
1M
400k
800k
1M
Full transcript