PROFESSOR PETER NAVARRO WILL TAKE YOU THROUGH THE PRINCEPLES OF ECONOMICS. FEEL FREE TO COMMENT ON HE WILL SAY. NAVARO IS A PROFFESOR OF BUSINESS FROM UNIVERSITY OF CARLIFORNIA.

The circular flow

The circular flow is a simplified version of showing how the economy operates. They are two types of circular flows ,pitting the one excluding foreign sector which is for a closed economy and the one including foreign sector which is for a open economy. For an individual to understand economics he has to first master the circular flow. The circular flow shows that households are the back bone of the economy because they directly and indirectly own the factors of production.

Background of Economics

Economics is the study of scarce resources to satisfy human needs and wants. Economics has been in existence since the creation of Eve Adam's wife (refer to the holy bible). Economics is not all about satisfing human needs and wants but anything that involves more than one person is suppose to be recognised as an economic activity ( this is not approved by any PhD economist ) . Anything that someone does with someone else is an economic activity. The only thing is that economics goes with view of an individual . The way some people view it might be 100% different to other people so its a matter of opinion based on facts.