Friday, February 6, 2015

Circular Flow Model



  • Circular flow model: represents transactions in a economy. All goods and services flow in a clockwise direction
  • Product Market: this is the place where goods and services are produced by businesses and are bought and sold to households                                                                                                         -firms sell, households buy
  • Resource or factor market: the place where households sell resources and businesses by resources                                                                                                                                           -firms buy, households sell
  • Households: person or a group of people that share their income                                                   -sell resources, buy products
  • Firms: is an organization that produces goods and services for sale                                               -buy resources, sell products
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1 comment:

  1. Alberto LopezFebruary 8, 2015 at 10:04 PM

    I love the style of your blog and the circular flow graph is very well detailed. Also, your notes are organized and easy to understand, but what about all the other subjects in unit two?? Inflation, GDP, GNP, Budget, Trade, Nominal GDP, Real GDP, etc?

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