The Circular Flow and National Income Accounting
Note: the first time you go through each of these topics you should click on the following items in sequence.
of the Great Depression of the 1930s and World War II were associated with
a revolution in economic thought, which at least for several decades shifted
the attention of economists from how individual markets work to how the
economy as a whole works. Before we look at that revolution in the next
topic, we need some conceptual equipment which enables us to talk about
the big aggregates, such as total output and total income in an economy.
In this topic we develop some basic concepts everyone has to be familiar
with in order to understand the important analytical and policy issues
we'll be dealing with in the remainder of the course.