Circular Flow Of Income
Categories: Econ, Education, Financial Theory
In economic theory, the trail of money exchange is a series of concentric, continual circles when viewed graphically.
People labor in producing goods and services in order to buy goods and services. They labor at the places that produce the goods and services so that they can ultimately buy the goods and services.
Of course, the circles get bigger as more parties get involved, but the principle is the same when scaled up or down. Kind of like Congress compared to a hamster wheel. Neither is designed to go any place...but both deliver the illusion of forward motion.
