An accepted general model of economic behaviour in Macroeconomics is the Circular Flow of Income, which depicts a simplified view of how sections of the economy (output, income and expenditure) fit together. Factors of production in the economy are generally categorised as land, labour and capital. Households are the ultimate owners of firms, therefore, it is accurate to say that households (people) sell their land, labour and capital to firms (producers) for which they receive …showed first 75 words of 1042 total…

…showed last 75 words of 1042 total…per capita GNP, indicating the quantity of goods/services available for each individual. However, in reality, no accurate measure of the standard of living exists because negatives (e.g. air/noise pollution); non-marketed incomes (e.g. work in the home); and unreported income (e.g. tax evaders) are not taken into account. REFERENCES / BIBLIOGRAPHY Economics: Sixth Edition - Begg, Fischer and Dornbush, pp. 329-345 (chapter 20) Economics 1: IPA Distance Education Notes - pp. 131-156 (Lessons 17, 18 and 19)