II. Circular Flow Analysis for lebanon

a) Use the circular flow analysis to illustrate and explain the key issues and economic shocks identified in the previous section and for which data has been shown. This provides the opportunity to demonstrate your understanding of economic information (data) within the context of individual markets and the interrelationship between markets. You need to use and move the demand and supply curves to show this. It is not enough to simply use arrows to show flows. You also need to show movements between markets and how a change in one market effects the demand and supply curve in another market.

b) Show the development of the key issues and economic shocks over time. This section brings together the sequencing of events and sets the scene for your circular flow illustration of the economic outlook in the next section.

• Section (a) and (b) can be combined but marks will be awarded separately as shown in the rubric.
• You can show the movements in individual markets in separate diagrams. However, it is critical to finally bring all demand and supply movements in all markets in the same diagram.
• Changes in prices, wages, exchange rates, etc. must reflect the information shown in section I. You would have made an error, for example, if you show wages decreasing in the circular flow diagram yet the data in section I shows increased wages.