Write a note on the circular flow of income in a two-sector economy? CIRCULAR FLOW OF INCOME IN A TWO-SECTOR ECONOMY:*INTRODUCTION:~ The two sector model is highly simplified models with only two sector-i.e. households and firms.~ It illustrates the circular flow of income between these two sectors.*ASSUMPTIONS:i) There are no saving by households or firms.ii) There is a certain degree of monetization in the economy.iii) The level...more
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