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Circular flow of income

This topic has 1 reply, 2 voices, and was last updated 5 years ago by Ken Garrett.

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November 17, 2019 at 12:09 pm #552905
farhaanm
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Concerning factors of production, in the notes it says that households provide for land and capital. Its not clear how household can provide that .
Also, how can firm provide rent and interest as income for household.
November 17, 2019 at 1:18 pm #552909
Ken Garrett
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Households = people. People provide capital through their savings being invested. Interest is the reward for investment. People own land and the land can be provided to producers who pay rent in return for that.
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