Final answer:
The circular flow of income illustrates the flow of production, income, and expenditure between sectors in an economy.
Explanation:
The circular flow of income describes the continuous flow of production, income, and expenditure among the different sectors of an economy. It involves the five main sectors: households, firms, government, the financial sector, and the rest of the world. In this flow, GDP = income = production = spending according to the national income identity.
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