Circular flow, demand and supply
Follow these guidelines that will assist you: What is circular flow? ? What does it depict? ? What does it illustrate? How many different versions of the model we have today? Leakages and Injections within the model? Provide a comprehensive analysis of the model (use tables and figures from the literature – academic journals and internet). After the analysis of the circular flow, make the connection with the demand and the supply. ? Use your own examples to present all possible variations of the determinants (both demand and supply) and how they are related with the circular flow; for example, if income increases, what happens to the demand and what impact this change may produce to the circular flow. ? More specifically, use figures to present the change in the determinant and then make the connection with the circular flow. ? Present only the one case of the determinants; for example, if you present the determinant of income increase, you don’t have to present the opposite (decrease). ? Always with reference the circular flow, give examples how the determinants of demand and supply affect the economic agents and their decisions. In doing so, have always in mind 1) to define the basic concepts, terminology and graphical techniques of microeconomics theory and how they are related, and 2) analyse the behavior of economic agents and the impact on their economic decisions using problem solving technique.