Describe the Circular flow of Income and Expenditure. How is Three-Sector Model different from Four- Sector Model? Discuss

The circular flow of income and expenditure is a fundamental concept in economics that illustrates the movement of money and resources in an economy. It is a model that shows how income flows through different sectors, creating a continuous cycle of production and consumption.

At the heart of the circular flow is the interaction between households and firms. Households provide factors of production—such as labor, capital, and land— to firms in exchange for wages, rent, and profits. Firms, in turn, produce goods and services that households consume, and households spend their income on these goods and services. This expenditure by households becomes ___ _____ ________ ________ ____ ________ _________ ________ ___ ____ ______.
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