Circular Flow Diagram Model. The circular flow diagram or circular flow model is a graphical representation of the flows of goods and money between two distinct parts of the economy. Market for goods and services where households purchase goods and services from firms in exchange for money.
Between the two are the product market and the resource market. Circular flow of income refers to the economic model describing the circular movement of money between firms producers and households. Helps to explain how participants in the economy interact with one another.
Both a and b are correct.
Circular flow of income refers to the economic model describing the circular movement of money between firms producers and households. A circular flow diagram is a model that a. In this video i explain the circular flow matrix and how products resources and money flow in a market economy. Market for goods and services where households purchase goods and services from firms in exchange for money.
