Tend to benefit by supporting the vulnerable in their society. Why, in cohesive societies, wealthy agents at the top of the social hierarchy The smooth operation of these financial intermediaries ensures that savers have a place to save and borrowers have a place to go to get funds. Then, we explain intuitively and prove mathematically Households and businesses are the most important savers in the circular flow of economic activity, while governments and businesses are the largest borrowers. Highlight how linear-algebraic and simple graph-theoretic methods help explain,įrom a fundamental point of view, some of the mechanics of class struggle inįragmented societies. The circular flow model of the economy distills the idea outlined above and shows the flow of money and goods and services in a capitalist economy. Equilibrium of national income is reached when (planned). Hierarchy to support the poor and vulnerable will be very difficult. Income going into the flow is called injections and income going out of the flow is known as leakages. We show that, in the case ofįragmented societies, convincing wealthy agents at the top of the social Model for income circulation is introduced, based on which we are able toĬategorize societies as fragmented or cohesive. We provide a simple and newĪpproach that is rooted in linear algebra and basic graph theory to capture theĭynamics of income circulation among economic agents. Rumah tangga konsumen membeli barang atau jasa dari rumah tangga produsen. The financial sector plays a crucial role in the circular flow of the economy by facilitating the movement of money and resources between households, businesses. Ada tiga arus dalam diagaram ini, yaitu: RTK membeli barang atau jasa RTP. Them in the absence of governmental institutions. Circular flow diagram tiga sektor (perekonomian tertutup) Merupakan kegiatan perekonomian yang melibatkan rumah tangga konsumen, rumah tangga produsen, dan pemerintah. `how' one could or should reach out to poor and vulnerable people to support Download a PDF of the paper titled On the mathematics of the circular flow of economic activity with applications to the topic of caring for the vulnerable during pandemics, by Aziz Guergachi and Javid Hakim Download PDF Abstract: We investigate, at the fundamental level, the questions of `why', `when' and
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