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Long answers Exam II

Long answers Exam II - Long answers 1 Choose an example of...

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Long answer’s 1. Choose an example of a commodity and explain how it travels through the THREE circuits of capital. In this larger process, how does money (M) make more money (M’)? Please emphasize the geographical relations between and among the circuits and offer examples. QuickTimeª and a decompressor are needed to see this picture. -T-Shirt -Money circuit: Money is invested to purchase labor and means of production -Purchase factories and hire employees to produce T-shirts. Buy raw materials. Point of investment -Production circuit: -Employees, raw materials (cotton) and factories are used to produce a new commodity, in this case, the T-shirt. Arriving with a new commodity -Commodity circuit: The T-shirt is then taken to market, where it is sold to make a profit. This profit is then reinvested into the production of the commodity to expand the business In the big picture, money is invested to make money through the profit of selling a finished commodity. Production of a commodity takes place in areas of low wage costs.
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