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Open economy circular flow model

Open economy circular flow model (Grade 12)

Tiaan Lötter

on 17 January 2013

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Transcript of Open economy circular flow model

Households Business Factors of production:
Labour / Land / Capital / Entrepreneurship Wages / Rent / Interest / Profit Factor market Aggregate Income (Y) Goods and services Comsumption Expenditure (C) Goods market Government Tax Indirect Tax Bank /
Stock Exchanges / etc. Benefits (B) Saving
(S) Investment
(I) Foreign Financial Market Payment for M Imports (M) Exports (X) Payment for X Direct Tax Government Borrowing Government Spending (G)
Subsidies (Su) Imports (M) Payment for M
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