The circular flow model of economics shows how money moves through an economy in a constant loop from producers to consumers and back again, factoring into a nation’s GDP.

In the study of economics, one learns the circular flow of the economy between firms and households. This post, however, presents another circular flow model based on capital and labor. (It is a ...

Leakage is an economic term that describes capital or income that escapes an economy or system in the context of a circular flow of income model. It results in a gap between supply and demand.