Distinguish between Three Sector economy and Four Sector economy.

1.	Distinguish between Three Sector economy and Four Sector economy.
Answer» Three Sector economy: 1. In this economy, flow of goods and money is circulated in households, business firms and government sector. 2. Symbolically – Y = C + I + G Four Sector economy: 1. In this economy, flow of goods and money is circulated in households, business firms, government sector and foreign sector. 2. Symbolically – Y= C + I + G + (X-M)

Answer»

Three Sector economy:

1. In this economy, flow of goods and money is circulated in households, business firms and government sector.

2. Symbolically – Y = C + I + G

Four Sector economy:

1. In this economy, flow of goods and money is circulated in households, business firms, government sector and foreign sector.

2. Symbolically – Y= C + I + G + (X-M)

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