Simplified representation of the main operations of the economy that shows the exchanges of productive factors and products between companies and domestic economies in the labor and goods and services markets, respectively. Income and expenditure operations carried out by the public sector and the operations of the various economic agents with the exterior can be added to this representation. An operation is an intentional action to negotiate something, change the physical or chemical characteristics of an object, modify the location of information, or obtain a new data or result from others and in accordance with pre-established rules.
« Back to Glossary IndexCircular flow of income
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