The circular flow model of economics shows how money moves through an economy in a constant loop from producers to consumers and back again, factoring into a nation’s GDP.

Learn the meaning of the terms "money flow" and "real flow." Find out how they relate to each other in the circular flow of income economic model.

Circular flow of income (two sector model); Methods of calculating National Income - Value Added or Product method, Expenditure method, Income method. Aggregates related to National Income: ...

The circular flow model demonstrates how money moves through society. ... For that reason, the model is also referred to as the circular flow of income model. Key Takeaways.