Type 2 words that describe the circular flow model?
Circular Flow Model is an economic model which shows the flow of money and goods between producers and consumers It consists of two markets: the goods and services market where firms sell goods and services to households; and the factor market where households sell factors of production to firms. In the model, firms, households, government and foreign sector are the four main sectors of an economy.
Circular Flow Model
Markets: refers to any exchange of goods and services between households and firms, where the price and quantity of goods and services are determined.
What are some examples of how firms interact in a circular-flow model of the economy?
How does government intervention impact the circular-flow model of the economy?
How do households and firms interact in the circular flow model of the economy, and what role do markets play in facilitating these interactions?