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Circular-Flow-of-the-Economy-Part-1

The document outlines the circular flow of the economy, focusing on the interactions between households, businesses, and financial institutions. It emphasizes the importance of savings and investment for economic growth and stability, highlighting the interdependence of households as consumers and businesses as producers. The session includes a simulation game for students to understand these concepts through role-playing.

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shai0shinso
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2 views

Circular-Flow-of-the-Economy-Part-1

The document outlines the circular flow of the economy, focusing on the interactions between households, businesses, and financial institutions. It emphasizes the importance of savings and investment for economic growth and stability, highlighting the interdependence of households as consumers and businesses as producers. The session includes a simulation game for students to understand these concepts through role-playing.

Uploaded by

shai0shinso
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Circular Flow of

the Economy
经济循环流转
Objectives
At the end of the session students will be able to;
a. Analyze the circular flow of goods, services, and money by identifying
and explaining the interactions between households, businesses, and
financial institutions within a simplified economic model;
b. Appreciate the interdependence between households and businesses
in sustaining the economy by reflecting on their roles as consumers
and potential contributors to economic activities.; and
c. Create a simulation of the circular flow model by role-playing as
households, businesses, or financial institutions, demonstrating the
exchange of goods, services, and money
Basics of Circular Flow
● Here is the Circular Flow Model diagram.
这是循环流动模型图
● It shows two main sectors: households and businesses.
它显示了两个主要部门：家庭和企业。
● Notice the arrows indicating the flow of goods, services, and money.
注意箭头表示商品、服务和货币的流动
Flow of Goods and Services 商品和服
务的流动
● Goods and services flow from businesses to households
through consumption.
商品和服务通过消费从企业流向家庭。
● Households provide resources and labor to businesses for
production.
家庭向企业提供资源和劳动力用于生产。
● Can you think of examples of goods you consume daily?
你能想到你每天消费的商品例子吗？
Relationship of Household and
Business 家庭与企业的关系
● Households and businesses are interdependent.
家庭和企业是相互依存的
● Households are consumers, while businesses are
producers.
家庭是消费者，而企业是生产者
● What goods or services do you think are most
exchanged?
你认为最常交换的商品或服务是什么？
Flow of Savings and Investment 储蓄与投资的
流动
Which illustration depicts Savings and
Investment? 哪幅插图描绘了储蓄和投资？
What is Savings? 什么是储蓄？
● Savings refers to the portion of income that is not spent on
consumption but instead set aside for future use. It typically involves
depositing money into a savings account, investing, or holding onto
cash for future needs or emergencies. 储蓄是指没有用于消费的收入部分，而是
为未来使用而储存。它通常涉及将钱存入储蓄账户、投资或保留现金以应对未来的需求或紧急
情况。
What is Investment? 什么是投资？
● Investment refers to the act of allocating money or resources to a
project, asset, or venture with the expectation of generating a profit or
return in the future. It involves putting money into things like stocks,
bonds, real estate, or businesses to earn income or increase in value
over time. 投资是指将资金或资源分配到项目、资产或企业中，期望在未来获得利润或回
报。它涉及将资金投入股票、债券、房地产或企业等，以获得收入或随着时间推移增值。
你认为储蓄和投资为什么对经济增长很重要？

Flow of Savings and Investment 储蓄与投资的流动

● How do savings and investment affect the flow of money in the


economy? 储蓄和投资如何影响经济中的资金流动？
● Why is a balance between savings and investment important for
economic growth? 为什么储蓄与投资的平衡对经济增长很重要？
● What would happen to the economy if people saved too much and
invested too little? 如果人们储蓄过多而投资过少，经济会发生什么变化？
你认为储蓄和投资为什么对经济增长很重要？

● How do savings and investment affect the flow of money in the


economy? 储蓄和投资如何影响经济中的资金流动？
Savings reduce immediate consumption but provide funds to banks and
financial institutions, allowing them to lend money to businesses for
investment. Businesses use these funds to expand, improve productivity,
and create jobs, which drives economic growth. Therefore, maintaining a
balance between savings and investment is crucial for keeping the
economy’s money flow stable. 储蓄减少了即刻消费，但为银行和金融机构提供了资
金，使其能够向企业提供贷款进行投资。企业使用这些资金扩展业务、提高生产力，并创造就业机
会，从而促进经济增长。因此，储蓄与投资的平衡对于保持经济的稳定流动至关重要
你认为储蓄和投资为什么对经济增长很重要？

Why is a balance between savings and investment important for


economic growth? 为什么储蓄与投资的平衡对经济增长很重要？

A balance ensures that enough money is saved for future investments


while maintaining sufficient spending to keep businesses running. Too
much savings can slow down demand, while too much investment
without savings can lead to financial instability. 平衡确保了有足够的资金储存用于
未来投资，同时保持足够的支出以维持企业运营。过多的储蓄可能会降低需求，而没有足够储蓄的
过度投资可能导致金融不稳定。
你认为储蓄和投资为什么对经济增长很重要？

● What would happen to the economy if people saved too much


and invested too little? 如果人们储蓄过多而投资过少，经济会发生什么变化？

If savings are too high and investments too low, economic growth slows
because businesses lack funds to expand. Consumer demand also
drops, leading to lower production and potential job losses. 如果储蓄过多而
投资不足，经济增长会放缓，因为企业缺乏扩张资金。消费者需求也会下降，导致生产减少和可能
的失业。
你认为储蓄和投资为什么对经济增长很重要？

Flow of Savings and Investment 储蓄与投资的流动

● Savings flow from households to financial markets.


储蓄从家庭流向金融市场
● Investment flows from financial markets to businesses.
投资从金融市场流向企业。
● Why do you think savings and investment are important for economic
growth?
你认为储蓄和投资为什么对经济增长很重要？
● Savings and investment are crucial for economic growth because
savings provide the necessary capital for investment, which in turn
leads to the creation of new businesses, innovation, and job
opportunities. Investment in infrastructure, technology, and education
helps increase productivity and efficiency, which drives economic
expansion. Without sufficient savings and investment, economies
may struggle to grow and develop. 储蓄和投资对经济增长至关重要，因为储蓄提
供了投资所需的资金，而投资则促进了新企业的创立、创新和就业机会的产生。对基础设施、
技术和教育的投资有助于提高生产力和效率，从而推动经济扩展。如果没有足够的储蓄和投
资，经济可能会难以增长和发展。
Class Activity 2: Simulation Game

● Now, we will play a simulation game!


● You will act as households and businesses exchanging tokens
(representing goods and money).
● What insights do you think you will gain from this activity?
Real-World Examples

● Let's look at real-world examples of circular flow.


● Consider local markets and global trade.
● How do changes in one sector affect others in the economy?
Conclusion

● To recap, we discussed the flow of goods/services and the


household-business relationship.
● We also covered the importance of savings and investment.
● Why is understanding the circular flow essential for economic
literacy?
Q&A

● Now it's your turn! What questions do you have?


● Are there any aspects of the circular flow that you find
challenging or interesting?
References

● Here are the sources we used for this presentation.


● Make sure to check them out for more information!
Thank You!

● Thank you for your attention and participation!


● I hope you enjoyed learning about the Circular Flow of the
Economy.

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