Distinguish between Two Sector economy and Three Sector economy. – InterviewSolution

InterviewSolution

1.

Distinguish between Two Sector economy and Three Sector economy.

Answer»

Two Sector economy:

In this economy flow of goods and money is circulated in households and business firms.
Symbolically – Y = C + I

Three Sector economy:

In this economy flow of goods and money is circulated in households, business firms and government sector.
Symbolically – Y= C + I + G.

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