Macro Economic Equilibrium

這是一個2-way的經濟, 一方面的支出, 就是另一方面的收入
試想一想, 一個簡單的經濟, 只有household及business, household支出勞力, 到business打工, 之後business付出了工資給household, 另一方面, household買business出產的貨物, household付出金錢, 而business得到了收入!! 這就是一個circular !!

Mordern economy economy comprises millions of individual economic units - households, firms and government. Together their decisions generate spending, output and income - three ways of measuring the total economic activity. The circular flow of income shows flows of goods and services and factors of production between firms and households.

Households provide their labour for firms who produce goods and services. In return people in work receive payments, such as wages, which in turn are spent on the output of firms. Not all of current income is spent - some is saved. This represents a leakage from the circular flow.

In addition to consumer spending, businesses also carry out capital investment spending (e.g. on new plant & machinery and buildings). Investment demand is an injection of money to the circular flow of income, as it does not originate from consumers' current income

深入一些, 加上government的支出, 如工務支出, government的收入就是靠taxation...

Government spending on state provided goods and services is injected into the circular flow and taxation will leak from it.

International trade plays an increasingly important role in shaping the performance of the economy. The value of exports sold overseas will be injected into the circular flow, whilst spending by consumers and businesses on imported products represent a leakage from the flow. (Goods and services are coming into the economy to satisfy domestic demand, but money to pay for them is flowing out of the economy).