The circular flow of income model is made up of five sectors. These include the

household, firms, finance, government, and external sectors. Each of these sectors has a vital and realistic role to play. The household secotr comprises of basic consuming units in society, but it is also the source of supply of the specialised labour force which is required by the firms sector. The business sector comprises of basic productive units in the economy, most production of goods and services is in the hands of private firms motivated by the desire to maximise their profits. The financial sector comprises mainly banks and the centeral bank which are responsible for issueing notes and coins, controlling the supply of money, and providing day-to-day requirements of the community. The government sector fits into the circular flow as a receiber and spender of income. It providescollective goods and services, such as defence, scho

The current state of the government sector is in a moderately bad state. They have currently outlayed more money than they have received in revenue. The government will not receive as much money in income taxes this year. There will also be a decrease in of revenue received from producing, selling and purchasing if goods if the current economic trend contnues. This is becuase there has been a decrease in purchases of goods due to a decrease of income. The government will also have to outlay more money for unemployed wellfair. My annalysis for this section was based on the Unemployment Rate graph in the stimulus, the comments in The Economic Rag and The Wenkster Mail, and the information on Commonwealth Budgets in the stimulus.

The foreign sector is in a slightly bad state. The foreign sector is importing more than it is exporting. I beleive that this will continue. But with consumption going down in Australia I beleive that the difference between our imports and exports will greatly decrease. My annalysis of this sector was determined by the information on Current Account (Exports and Imports) 1998-99.

The business or production sector is in a small slump at the present time. The production of business' has been low due to the decrease ing demand from the household sector. This is br

Some common words found in the essay are:
, Economic Rag, Exports Imports, Commonwealth Budgets, Wenkster Mail, circular flow, Unemployment Rate, recent drop production, comments economic rag, household sector, drop production, recent drop, economic rag, business sector, foreign sector, annalysis sector, comments economic, economic rag stating, flow income model, flow income, drop production levels,
Approximate Word count = 873
Approximate Pages = 3 (250 words per page double spaced)