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Circular Flow With All The Components

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Uploaded by on Aug 21, 2009

http://trcb.us/zaheer - The most comprehensive circular flow model includes the foreign sector. In an earlier article the discussion included the simple or basic model and the one with Three Sectors and Three Markets. Adding the foreign sector highlights the role of trade with the Rest of the World (ROW). In those models we assumed U.S. to be a closed economy. Now we open our borders for imports and exports and other international transactions.

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