Answer to Question #70075 in Microeconomics for Walter
Discuss the circular flow diagram with four markets players (household, Firms, the Government and the rest of the world)
The four-sector, three-market circular flow model highlights the key role that the foreign sector plays in the economy. It expands the circular flow model by illustrating how exports add to, and imports subtract from, the domestic flow of production and income. This is the "complete" model containing all four sectors and all three markets.
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