The phase of production: This phase involves value addition in the goods and services.
The phase of generation: This phase involves distribution of factor payments.
The phase of expenditure: This phase involves consumption expenditure i.e. households with the help of factor payments buy goods and services produced in the phase of production.
Real flow and money flow:
Real flow: It is the flow of goods and services across different sectors of the economy.
Money flow: It involves flow pf factor payments and payments of goods and services.
