Circular Flow Diagram Of A Market Economy. Market for goods and services where households purchase goods and services from firms in exchange for money. In this video i explain the circular flow matrix and how products resources and money flow in a market economy.
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Primarily it looks at the way money goods and services move throughout the economy. The most common form of this model shows the circular flow of income between the household sector and the business sector. The outer set of arrows shown in green shows the flow of dollars and the inner set of arrows shown in red shows the corresponding flow of inputs and outputs.
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.
I also define the factors of production pu. The outer set of arrows shown in green shows the flow of dollars and the inner set of arrows shown in red shows the corresponding flow of inputs and outputs. The model represents all of the actors in an economy as either households or firms companies and it divides markets into two categories. 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.
