Circular Flow of Money: Money flows between producers and consumers: Money Citizenship: Introduction to Economics

About the Unit In the Introduction to Economics Unit we will be exploring the following questions: Why do we have private property? Why do we have money (currency)? What is inflation? How does money and goods flow between producers and consumers? Why are some goods/services more expensive than others? How the economy can be measured?

Money flows...

Interdependence...

Historical Examples English economist William Petty introduces concept of national income and expenses Irish banker Richard Cantillon’s publishes an essay in France discussing the circulation of money from the city to the country French Surgeon Francois Quesnay describes the circulation of money in the economy similar to the circulation of blood throughout the human body Karl Marx describes the circulation money using a model inspired by Francois Quesnay’s statement. 1930’s - Russian-American economist Simon Kuznets develops national income accounting methods.

Summary Money flows between landowners, farmers, artisans continuously therefore money and goods flow between producers and consumers. Producers depend on consumers for labor and to get goods/services and consumers depend on producers for wages and to provide goods/services therefore producers and consumers are interdependent.