A Pictorial Representation of the Realities of Circular Flow

This is less of a diatribe on my part and more of a comparison of how we are taught the circular flow of resources with how it seems the circular flow actually occurs. The first image is a simple representation of economic circular flow:

Circular Flow Model

Notice the resources and the income arrows are relatively the same size. The same goes for the arrows related to the government. The second image is a representation of how the circular flow has been affected by the actions of the government and the wealthy:

Circular Flow Model as it occurs

Please note the difference in the arrow sizes and the extra information.


If you have a conflicting view of this situation – feel free to share it in the comments section. It is most likely that I won’t respond, but at least you will get the chance to express your perspective.


Have a Nice Day!

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