Unit 2.12 · The Market’s Inability to Achieve Equity
Circular Flow and Inequality
AO2HLDiagram required
Syllabus Requirement
Using the circular flow of income model to illustrate how income disparities arise in free market systems.
Assessment Objectives
AO2Application and Analysis
Summary
This topic explores the circular flow of income model and its implications for income and wealth inequality. It highlights how the distribution of income and wealth can be affected by various factors, leading to inequities within an economy. Understanding these dynamics is essential for analyzing economic disparities at both micro and macro levels.