Circular Flow: A Simple Model of the Eco...
Debaere, Peter
Circular Flow: A Simple Model of the Economy
G-0596 | Published August 10, 2007 | 7 pages. Technical Note
Collection: Darden School of Business
Product Details
This note discusses circular flow. With a simple model, it is shown how changes in the components of expenditures affect overall income. The analysis is both graphical and algebraic.
The learning objectives are to refresh key concepts and tools from microeconomics and macroeconomics; emphasize the role of economics in the MBA curriculum; and show how analyzing economic agents as maximizers of profit and/or utility deepends one's understanding of the environment of the firm.
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