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December 3, 2021 

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ABSOLUTE ADVANTAGE: The general ability to produced more goods using fewer resources. This idea of absolute advantage is important for trading that occurs between both people and nations. A nation can get an absolute advantage from an advanced level of technology or higher quality resources. For a person, an absolute advantage can result from natural abilities or the acquisition of human capital (education, training, or experience).

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CIRCULAR FLOW: The continuous movement of production, income, and resources between producers and consumers. This flow moves through product markets as the gross domestic product of our economy and is then the revenue received by the business sector in payment for this production. This stream of revenue then flows through resource markets as payments by businesses for the resources employed in production. The payments received by resource owners, however, is nothing more than the income of the household sector. The resource owners of the household sector use this income to purchase goods and services through the product markets, coming full circle to where we began.

     See also | production | consumption | income | resources | product markets | resource markets | financial markets | business sector | household sector | government sector | foreign sector | investment | saving | government purchases | exports | imports |


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CIRCULAR FLOW, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2021. [Accessed: December 3, 2021].


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IN-KIND PAYMENTS

A payment, usually in exchange for the productive efforts of resources, that takes the form of goods and services produced by the resource buyer rather than the economy's standard monetary unit (that is, dollars). In other words, resource owners are compensated with a portion of the output that they help to produce. The standard method of compensation, which is illustrated by the circular flow model, is for a firm to pay resource owners using money revenue received from selling its production. Hence most factor payments are monetary payments. However, in some circumstances firms and resource owners find it more convenient to use actual production for compensation, eliminating the sell-production-for-money step.

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Today, you are likely to spend a great deal of time looking for a downtown retail store hoping to buy either a pair of red goulashes with shiny buckles or a handcrafted bird feeder. Be on the lookout for malfunctioning pocket calculators.
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On a typical day, the United States Mint produces over $1 million worth of dimes.
"If a man hasn't discovered something that he will die for, he isn't fit to live. "

-- Martin Luther King Jr., clergyman

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