Simple Economy: Model 6
This model shows the structure and operation of a simple economy. It can represent economic systems at different levels of abstraction (e.g. a single good, a group of goods, multiple groups, & an "economy.")
In summary, lower rates of consumption (based on production) result in higher rates of production and consumption in the long-run. Rates of consumption over 100% of production will diminish the savings stock and eventually cause rates of production and consumption to fall.