--%>
Assignment Help - homework help

What are the limitations of Circular Flow Model

What are the limitations of Circular Flow Model?

E

Expert

Verified

1. Does not depict transactions between households and between businesses.

2. Ignores government and the “rest of the world” in the decision-making process.

3. Does not explain how prices of products and resources are actually determined.

   Related Questions in Business Economics

  • Q : How government might manipulate its

    Explain how government might manipulate its expenditures and tax revenues to reduce unemployment?

    		•
  • Q : Cost of debt and Equity Cost of debt =

    Cost of debt= (1-tax rate)* interest rate * (debt ÷capital employed)Cost of equity = risk free rate + market premium (equity shareholders funds÷ capital employed)

    		•
  • Q : Economic sense production methods

    Evaluate and explain the statements: “In the economic sense production methods are the most efficient methods, once resource prices are considered and are lesser in sense of engineering”.

    		•
  • Q : International Trade & Globalization

    Question: 1.   Long-term Growth, International Trade & Globalization a.   In terms of understanding the importance of trade to an economy, the most impor

    		•
  • Q : What do you mean by Financial Linkages

    What do you mean by Financial Linkages in U.S. and World Trade?

    		•
  • Q : Utility with food coupons Question: In

    Question: In Vancouver the Salvation Army encourages people to make food voucher donations to panhandlers instead of simply giving them cash. You can buy a food voucher for $5 and give it to a panhandler who can use it to purchase food. The Sa

    		•
  • Q : Explain how an increase in state

    Use two market diagrams to explain how an increase in state subsidies to public colleges might affect tuition and enrollments in both public and private colleges.

    		•
  • Q : Raising consumer surplus problem For

    For the question below, utilize the given information. The market for gizmos is competitive, with an increasing sloping supply curve and a downward sloping demand curve. With no govt. intervention, the equilibrium price is $25 and the equilibrium quantity is 10,000 gi

    		•
  • Q : Why producers not be able to find

    Why producers not be able to find enough paying buyers for “public goods”?

    		•
  • Q : Major type of expenditure at the state

    What is the most important source of revenue and the major type of expenditure at the state level?  

    		•