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SubjectsEconomics
आय का चक्रीय प्रवाह: द्वि-क्षेत्रीय मॉडल
Study the Circular Flow of Income: Two-Sector Model in Class 12 Economics as part of National Income and Related Aggregates. This topic explains how households and firms interact through factor services, factor payments, consumption expenditure, and the production of goods and services. Students learn to distinguish real and money flows, understand the role of savings and investment, and see how equilibrium is represented when leakages equal injections. The model builds a foundation for analysing national income and macroeconomic activity.
TOPIC PRACTICE
Up to 2 questions from this page. Select your focus, then start.
An increase in autonomous investment raises aggregate expenditure directly. When MPC is high, much of the additional income is quickly spent, producing a strong increase in demand. If firms cannot raise output immediately, sales may exceed current production and inventories will be drawn down. This is a possible short-run signal, not an unavoidable outcome.
In the two-sector model, planned saving S and planned investment I are central indicators of equilibrium. If S exceeds I, firms face an unintended accumulation of inventories and may reduce output; if I exceeds S, inventories tend to fall and firms may expand output. The same process should be located on the diagram by tracing the movement toward or away from equilibrium income.
QUIZ COMPLETE
