Circular flow of income and expenditures | Macroeconomics | Khan Academy

[@Christopher4700]

this guy on that island has some serious issues

[@vietnguyenc6612]

mentally, right?

[@xios1515]

#Theguyontheislandthathasmentalissues

[@digitalcommuneeconomicsphi6149]

@@xios1515 lol

[@reasonerenlightened2456]

Did you notice how the humans are just things in this model, a property. Are you a property? Both 'households' and 'Firms' are owned by humans therefore the correct categories must be between owners and employees (i.e. non-owners). !*** There is the owner and the employee.*** The entire model of 'Circular flow of money and a Simple Economy' is a blunt distortions of reality, Fake thinking A lie or an extraordinary example of poor reasoning which has penetrated deep in our education, and the way we think think about the society. The box for 'Firms' is conjured on the assumption that 'Firms' are somehow qualitatively different than any other article of Property. A Firm is exactly the same as a toaster, or a washing machine, or an oven or any other article of Property with a function, and it does not matter if the toaster, the washing machine, the oven, etc use electricity or a bunch of human-people must run around all day collecting wood, maintaining fire, toasting, baking or washing all by hand to achieve the same result. Firms are no more "legal entities" than your back-up power generator is a "legal entity", and it does not matter if it runs on fossil fuels or if a bunch of humans must run on treadmills all day. Firms are just property and should be treated as such by the laws. Therefore the entire premise of the diagram is based on a False reasoning. It is scary to realise the extent of penetration of the immoral reasoning on which the 'Circular Flow of Income Diagram' is based. Humans as property!!! We must stop and rethink, do we wish to continue using the model on which the diagram is based. As I said, Ultimately, the 'Employee' makes the products, takes those products to the market, sells the same products, he made, to himself and finally he pays a fee known as Profit to some 'Owner' for a permission to own the same products he made and sold to himself. The owner gets to collect profit for doing nothing.....and many call that 'earning' instead of 'taking'. The way forward to a better society is to increase and maintain a strong minimum purchasing power of the end-consumer using the magic formula. (Magic Formula: 'Your minimum Purchasing Power' = 'minimum wage' + 'Benefits payments' - 'Cost of dignified living from cradle to grave' - 'Taxes, fees, penalties') Firms are no more "legal entities" than your back-up power generator is a "legal entity", and it does not matter if it runs on fossil fuels or if a bunch of humans must run on treadmills all day. Firms are just property and should be treated as such by the laws. Save the minimum purchasing power of the human citizens instead of saving businesses/firms.

[@cheychi4633]

😂😂

[@emmalyngrace5978]

Right after he corrected himself for saying months instead of years, he immediately said months again 😂

[@keb990]

I had to rewind lmao.. like wutt

[@mc2gregory]

I liked this one a lot; it helped me apprecite a different view of our actual economy, where the beginning premise is that we're all pretty much in this together.

[@khanacademy]

@AnalyticalInsanity every year

[@milkchocolateboombox7845]

man my Econ teacher just made us spend 8 minutes watching this with all of the lights off and then was upset people were sleeping

[@reasonerenlightened2456]

================= The entire model is a lie. =============== ==========< There is the owner and the employee.>========== Ultimately, the 'Employee' makes the products, takes those products to the market, sells the same products, he made, to himself and finally he pays a fee known as Profit to some 'Owner' for a permission to own the same products he made and sold to himself. The owner gets to collect profit for doing nothing.....and many call that 'earning' instead of 'taking'. The way forward to a better society is to increase and maintain a strong minimum purchasing power of the end-consumer using the magic formula. (Magic Formula: 'Your minimum Purchasing Power' = 'minimum wage' + 'Benefits payments' - 'Cost of dignified living from cradle to grave' - 'Taxes, fees, penalties') Firms are no more "legal entities" than your back-up power generator is a "legal entity", and it does not matter if it runs on fossil fuels or if a bunch of humans must run on treadmills all day. Firms are just property and should be treated as such by the laws. Save the minimum purchasing power of the human citizens instead of saving businesses/firms.

[@ouranoswealthgroup7042]

It's the total set up. you better clap on, next time! U need this class, especially if you're a young person. I'm back like i never left from 23 years ago, and it makes WAY more sense this time around.

[@reasonerenlightened2456]

@@ouranoswealthgroup7042 Did you notice how the humans are just things in this model, a property. Are you a property? Both 'households' and 'Firms' are owned by humans therefore the correct categories must be between owners and employees (i.e. non-owners). !*** There is the owner and the employee.*** The entire model of 'Circular flow of money and a Simple Economy' is a blunt distortions of reality, Fake thinking A lie or an extraordinary example of poor reasoning which has penetrated deep in our education, and the way we think think about the society. The box for 'Firms' is conjured on the assumption that 'Firms' are somehow qualitatively different than any other article of Property. A Firm is exactly the same as a toaster, or a washing machine, or an oven or any other article of Property with a function, and it does not matter if the toaster, the washing machine, the oven, etc use electricity or a bunch of human-people must run around all day collecting wood, maintaining fire, toasting, baking or washing all by hand to achieve the same result. Firms are no more "legal entities" than your back-up power generator is a "legal entity", and it does not matter if it runs on fossil fuels or if a bunch of humans must run on treadmills all day. Firms are just property and should be treated as such by the laws. Therefore the entire premise of the diagram is based on a False reasoning. It is scary to realise the extent of penetration, in the minds and the education, of the false reasoning on which the 'Circular Flow of Income Diagram' is based. We must stop and rethink, do we wish to continue using the model on which the diagram is based. As I said, Ultimately, the 'Employee' makes the products, takes those products to the market, sells the same products, he made, to himself and finally he pays a fee known as Profit to some 'Owner' for a permission to own the same products he made and sold to himself. The owner gets to collect profit for doing nothing.....and many call that 'earning' instead of 'taking'. The way forward to a better society is to increase and maintain a strong minimum purchasing power of the end-consumer using the magic formula. (Magic Formula: 'Your minimum Purchasing Power' = 'minimum wage' + 'Benefits payments' - 'Cost of dignified living from cradle to grave' - 'Taxes, fees, penalties') Firms are no more "legal entities" than your back-up power generator is a "legal entity", and it does not matter if it runs on fossil fuels or if a bunch of humans must run on treadmills all day. Firms are just property and should be treated as such by the laws. Save the minimum purchasing power of the human citizens instead of saving businesses/firms.

[@intellegence63smart]

100% on my Exam, thanks Khan!

[@tripleabdinho2710]

Hello👋

[@Vanessa-zi4og]

Thanks a lot!! I have only just started on this for MacroEconomics... great start for me.

[@Ana0.0]

simply wow!!!! amazing way to explain this! I don't know how much my teacher explain this to me it did not enter in my head... it seems quiet simple but when it comes from questions I do not know how to apply this maybe this will help me in my next exam! thankyouuu so much! it is still helpfull these days since I saw a comment was made 10 years ago!!

[@kylestail]

Brilliant example to explain this. I appreciate it. Thanks.

[@travisvo8497]

Am I the only one here who is confused? :c

[@friedlemons5201]

No

[@junbangli6944]

No

[@indianarchangel]

Just enrolled for an Econ course and I was not understanding anything until I came across your videos. Thank you so much! Love from Hyderabad, India.

[@lf9147]

Good way of explaining it. Harder to understand with one man, but at the same time, if you do get it, you'll kinda get the material.

[@jonvo9534]

So this guy gets capital from himself, has his own firm, his own economy, and pays himself rent?

[@navyajyotsna9617]

Jon vo lol

[@onlinemall7288]

That's me.. Lol

[@ryanwong7426]

yes

[@sabaa8385]

I want more of this island guy what’s he up to

[@yashbhardwaj3499]

life savior vid ... thanks a lot from India :-) :-)

[@KumarAadarsh]

Thank you khan academy!

[@ouranoswealthgroup7042]

Omg, you totally explain MY eco system. This is it! It's been hidden in the two most difficult classes for me all along -- micro econ and accounting (both mathematics focused), because I would shut down my rational brain too often and teachers didn't know how to teach me. :) Econ and Accounting. I ALMOST want to go back to school for a Business degree while running my businesses, but I think i'll just keep watching your academy videos and walking the path in trial by fire! It's starting to feel natural and i'm starting to trust myself like I didn't back then! Amazing breakdown... I swear I saw it just like this in my mind --- all revenue in, no revenue out, tax-exempted entities only!

[@saharshverma7026]

ok

[@ninavanwyk7042]

Thank you

[@flash-l8o]

I don't get how people love or understand Khan Academy...

[@mariaestrada3683]

Bruh

[@DistributistHound]

Then the banks show up start lending money, for new production whose money? Theirs why? because there was only 3500 and if households multiply, production should increase accordingly therefore more money is needed and some time later what was a self liquidating economy has become an inflationary and deflationary system because banks only lend and never give free money to reflect the value of a circular economy.

[@RaseditsNathium]

perfect explanation

[@funwithanshupathak]

great explanation

[@engchoontan8483]

I hint and suggest and insinuate and propose and indicate and ... = old school and modern things people missed out while shopping Thanks to you, you kept the economy going by macroEconomics. Different class segments, different educational levels, different skill levels... many type-circle-rings of macroEconomics.

[@naufalfawwaz7305]

Thanks a lot! From Indonesia!

[@kelvingomez929]

Master Roshi from Dragonball lol

[@DondeEstaVee]

Why now!!! MY EXAM WAS YESTERDAY!!! WHY IS THIS POSTED NOW!!!

[@skulker5805]

ha 90s kids

[@XxHamletJacobsXx2022]

God bless you Khan!!

[@BurkeyAcademy]

Khan- you might want to move the MACRO videos to a playlist called MACRO, instead of including the in the micro playlist.

[@thomasmcgraw8778]

the thought in the back of my mind that kept making this so much harder to understand is "uhhh wait no one's actually paying anyone. it's him paying himself for his own stuff."

[@sudiprijal9968]

It was very helpful , thanks .

[@mohammadrezaee873]

Thank you so much for helping.Its reallyy useful

[@radiumrk]

Well Explained

[@jckgoldness]

thx i have a test on monday that covers this

[@zhixian4251]

this vid is simply amazing.

[@DistributistHound]

This shows mainly the economic part of the flow but partially the financial part of it. How does money flow theory and the banking systems fits here?

[@user-jt9fi2kl6n]

You need two people to start an economy. The one person makes it confusing.

[@timurumarov8282]

Amazing videos! very helpful. Thanks)

[@parmindersinghraj7424]

amazing video!

[@JC6659]

I was understanding things until 6:30. Got lost by then.

[@ashar4121]

Maybe you don't believe me sir, but I in fact, am the whole economy here. ---A guy who rent a house from himself buy crops which he grows it himself on land which he rents to himself and earns a profit out of himself

[@martijn.martens]

Thanks a lot!!

[@alHuwariyunMuslim]

Introduce taxes into this scenario and now no one can afford anything lol 😂

[@TheTrainIsCominggggg]

NO WAY! awesome!

[@eff700]

please: MORE... MORE... MORE!!

[@HL-iw1du]

he’s paying rent to himself?

[@olasving1]

@AnalyticalInsanity Most probably every year, as that's what he said in the beginning and often throughout the video.

[@italiansoutherner]

My professor explains that households give "consumer expenditure" to the product market and taxes to the feds. Nothing about factors of production to firms. :/

[@cagataygulcan4411]

Hey, in this video doesn't work subtitle. (Turkish)

[@peterlundwe5848]

thanks

[@gamingdevil204]

That dude need to think formally about survival 😂🤣

[@soulreaperichig0]

Corrupt bureaucracy in a nutshell

[@prashantgarg2098]

Factors of production are a Kind of services so why dont they count up in calculating GDP

[@ethergaming2665]

I am not able to understand rent..how firm provides him shelter??

[@zhiyuanli7413]

Wow is it explains why there are three definitions of GDP? Interesting ...

[@goodnewsernest126]

This one guy thing makes it very complicated for me

[@MrOJproductions]

Someone explain what Quesnays version of this is

[@Oxcilic]

is this assuming the household will spend 100% of its income on goods and services?

[@paulvandal4444]

Yes, unless you want to discuss the banking loop in which the owner/householder saves some small sum he inturn lends to the firm and receives interest.

[@haroldh6678]

honestly confused about the concept of a "household". When you live in a city with millions of "households" how does that play into effect with firms? I don't see the correlation of my house and the firms out in the city or is it some crazy network?

[@blast2686]

This is just an hypothetical example

[@quezellevanschalkwyk5889]

So the the household also pay rent to the firm and the firm to the house hold im really struggling here

[@santoshsapkota7858]

I wanted a four sector i can do better expalaination than this on 2 sector

[@thomaschindende5242]

santosh sapkota did you get the 4 sector model

[@pratishamushyaju3800]

how to get subtitles for this video

[@maheshrathi37]

pratisha mushyaju by clicking on cc button

[@SharinaCheng-oi3oi]

im so confused isnt rent money earned only from land which is naturally occurring resources - you call your house capital because its man made yet you make (rent) from it? I thought you made interest from capital. helppppp is my proof confusing me for no reason

[@chelsyrobinson680]

This video really confused me ... can you do another with more than one man...

[@smokinacez3258]

Confusing

[@PuudingMusic]

Anyone know this American comedy group called The Lonely Island

[@EdinahChisenga]

But what you are discussing is totally different from the title😢 of your tutorial, i mean how can you discuss circular flow of income in Macroeconomics without inclusion of Government? This is circular flow of income in microeconomics. Don't confuse us please.

[@EmilianoLeopoldino]

Oversimplified...

[@philippessle5030]

***** boa milho!

[@EmilianoLeopoldino]

MORTO Q VC ME ACHOU AQUI Philipp Essle​

[@aruzhansabitkyzy1168]

why the other majors are more interesting than mine hahaha( i am doing cs degree)

[@RayLRhodes]

Sal is an INTP.

[@shibinshibin8365]

Good help me

[@coffeejitterz]

So many problems with this video :( The building should be categorized as Capital, whose income is called "Interest" (not Land=Rent) Also, if we are only concerned about "money coming out of this business" that would be Accounting Profit, not Economic Profit. More errors than time to write.

[@geminix365]

Are you kidding

[@Sait828]

bro 4 sector flow

[@FourFourTwoYC]

why is he paying for his own shelter

[@onlinemall7288]

?????????? What the hell............

[@salsabilchy2556]

6:31 holy shit thank me later

[@Frenk33]

The entire model is a lie. There is the owner and the employee. Ultimately, the 'Employee' makes the products, takes those products to the market, sells the same products, he made, to himself and finally he pays a fee known as Profit to some 'Owner' for a permission to own the same products he made and sold to himself. The owner gets to collect profit for doing nothing.....and many call that 'earning' instead of 'taking'. The way forward to a better society is to increase and maintain a strong minimum purchasing power of the end-consumer using the magic formula. (Magic Formula: 'Your minimum Purchasing Power' = 'minimum wage' + 'Benefits payments' - 'Cost of dignified living from cradle to grave' - 'Taxes, fees, penalties') Firms are no more "legal entities" than your back-up power generator is a "legal entity", and it does not matter if it runs on fossil fuels or if a bunch of humans must run on treadmills all day. Firms are just property and should be treated as such by the laws. Save the minimum purchasing power of the human citizens instead of saving businesses/firms.

[@solidsender69]

why do I feel like you are talking to like I am dumb?

[@travisvo8497]

Is he working then paying himself his own money?

[@lawentahar3730]

+Travis Vo no, households works for firms and firms give the households income which they can use to spend basically imagine yourself working for a boss, they give you income, say £20 every hour. You can then use your money that you gained from working to spend on goods. Thats basically the circular flow. households gain income and households spend the income they gained. Households as in people that work.

[@dophie1557]

Travis Vo yeah...I think the fact that he used the same guy as the household and the firm makes it confusing...

[@digitalcommuneeconomicsphi6149]

His own house and his own firm and he self sell buy etc etc etc...

[@blast2686]

It’s just an hypothetical example

[@camelCaseFTW]

abbreviate? or forgot how to spell entrepreneurship? :D (jokes)

[@guyoflife]

This is confusing. So he owns a firm and is paying rent to himself and confusing confusion? Isnt there a less confusing way this could be broken down?

[@SamsEconomicstutorials-jn9dc]

Thank you.your videos are impressive. I have also created a KZbin channel " Sam's economics tutorials"

[@yp06407012]

what happens when he gets married....???

[@RayLRhodes]

What does that have to do with my comment?

[@Jemimakl]

hi econ2123

[@jayp6955]

This is a very poor example.

[@ifeanyiibeanu7765]

Worst deal ever!!!!!!!