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The economics of dark kitchens

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The circular flow of income

Studying the circular flow of income enables us to understand how different parts of the economic system fit together. The model shows the connections between different sectors of our economic system: firms, households, banks, government and international trade. It demonstrates how funds flow between these sectors

See Figure 1. The inner flow shows the flow of funds between households and firms only.

■ Households earn factor incomes (Y) and sell their labour to firms.

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Previous

The economics of dark kitchens

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Competition for jobs: exploring the Covid-19 skills mismatch

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