Understanding the Economic Cycle
Introduction
The economic cycle is a theoretical framework that attempts to model the complex interactions within an economy. It involves various economic agents, or "subjects," that are connected in intricate ways.
The Concept of an Economic Cycle
An economic cycle represents a hypothetical construct that tracks the flow of goods and money within an economy. The basic economic cycle involves two primary actors: households and businesses. As the division of labor intensifies, the scope and complexity of economic cycles also expand.
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