Friday, January 23, 2015

Step 8: Circular Flow Model

Circular Flow Diagram -

  • represents transaction in an economy (ex: like the market)


Economic Factors -


  1. Household : person/group that shares income
  2. Government :
  3. Firm : organization that produces goods and services for sale

Market - 

  1. Resource/Factor : place where household sells resources and businesses buy resources
  2. Product : place where goods and services are produced by businesses and both are sold by household

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