Material Detail

The Circulation of Currency in the Macro-economy (Closed System)

The Circulation of Currency in the Macro-economy (Closed System)

This model of the macroeconomy (closed social system) is as comprehensive as possible without it being too complicated (according to Prof. Einstein's dictum for providing in an explanation as much simplification, but not too much). In the past the tradition of 2 and 3 sector models (householder/producer etc.) were oversimplified. In this model there are 6 "entities" all of which play vital roles in the complete system. Their 19 individual roles or functions can be seen when the various flows of goods, services and valuable documents are examined. They each take an algebraic symbol (for later use in analysis). These flows are mutual, money always passing in the returning reciprocal direction. It is seen that the 3 Smithian factors of production (Land, Labour and Durable Capital Goods) are... Show More
Rate

Quality

  • Editor Reviews
  • User Rating
  • Comments
  • Learning Exercises
  • Bookmark Collections
  • Course ePortfolios
  • Accessibility Info (1) Accessibility Infos

More about this material

Comments

Log in to participate in the discussions or sign up if you are not already a MERLOT member.