How does tourism affect circular flow in an economy?
I'm under the impression that an economy that did not previously have an international sector would develop one as a result of tourism. Because aren't tourists considered an import? I just need help understanding how adding tourism to an economy changes the overall circular flow of the economy.
Okay, the tourism acting as more of an export than a import makes sense. And arin, I live in Seminole about 10 min from Treasure Island so it was cool that you could bring the concept home for me.
CIRCULAR FLOW: Foreign tourists spend money and that money generates higher incomes, which is then spent by individuals on more products and services, meaning more income for businesses, meaning higher incomes, etc.
IMPORTS? Tourism money acts more like exports than imports, since a country is selling its resources (natural beauty) and services (hotels, restaurants) in return for foreign money.
Tourism in Lorraine - France - Highlights
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