Circular flow development concept PDF

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All about macroeconomics, circular flow development concept...

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Circular flow development concept

Abel Getahun Assefa Department of Business Administration, University of the people BUS 1104: Macro Economics Professor (or Dr.) Mitra Farkhani Date 11/17/2021

Circular flow development concept

In this paper I am going to demonstrate the circular flow of a business that sells a bread and how the market for resources and the market for goods and services goes for them. Before I start first let me talk about the two different types of markets the first one is where the household holds all the labors, lands and capitals and the business only holds the money. The second type of markets is where the business holds all the lands, Laboure’s and capitals and the households only have the money. With that bee said now lets talk about what kind of land, Laboure and capital the household holds in the first market, since our good is bread and what the business offers is a bread, what the business wants is things that are related to the making of the bread, there for it is looking for a households that can provide things like flour, bakery machineries and peoples how can bake the bread and also can serves the products to the customers, so in the first market the business buys all the things they want for their business there for now they have all the Laboure, land and capital they want and on the other hand the

households know have sells the thing that they ca afford for the business and have the money for their resources. The second market begins after this, since the households now have money they want to buy things for them selves and like for the business what they offer is something that is necessary for all the householders there for in this market the thing that are going to sell is a bread and the one who is in the position of selling those breads are the business and the ones who want to buy the bread and in control of the money are the householders so they will exchange what they have with what they want to have after this the circle will be done again means that the business will be in charge of the money and the households will be in charge of the resources again and both of them wants what they did not have so it will happen in circles. To conclude what have been stated so for the circular flow is something that shows the circularity of things so to demonstrate that I used how a business that sells bread will always in circulation with the household that provides what the business wants, to simplified it the market starts by the business holding the money and the households holding the resources but at the end of the day the business wants the resources to sell them and gain more money and the house hold wants the money to buy resources so that they can make more resources that they can sell to get more money....