The Circular Flow Diagram Of Economic Activity Is A Model Of The

Flow of goods services and payments between households and firms in the households receive goods and services and pay firms for them. The model represents all of the actors in an economy as either households or firms companies and it divides markets into two categories.

Circular Flow Ofreal Economic Activity 6 1 2017 20170602 0

Flow of goods services and payments between households and firms.

The circular flow diagram of economic activity is a model of the. The circular flow in a two sector economy. Flow of goods services and payments between households and firms circular flow of the economy. The circular flow diagram of economic activity is a model of the.

The circular flow diagram is a basic model used in economics to show how an economy functions. In the diagram there are two main characters known as firms and households where households represent consumers and firms represent producers. One of the main basic models taught in economics is the circular flow model which describes the flow of money and products throughout the economy in a very simplified way.

Consumers and firms are linked through the product market where goods and services are sold. The circular flow diagram of economic activity is a model of the. Primarily it looks at the way money goods and services move throughout the economy.

The circular flow diagram of economic activity is a the circular flow diagram of economic activity is a model of the. In a simplified economy with only two types of economic agents households or consumers and business firms the circular flow of economic activity is shown in figure 10.

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