In The Circular Flow Model Which Direction Does Money Flow. In this way money flows in a circular manner from the business sector to the household sector and from the household sector to the business sector in the economy. In short an economy is an.
The Circular Flow Model That Depicts The Interrelationship Between Download Scientific Diagram from www.researchgate.net
The circular flow model demonstrates how money moves through society. Wages rent interest and profit. The flow of products goods and services and resources on the outer circle and the flow of money payments on the inner circle.
Terri is enrolled in her first economics course.
To provide goods and services to households the product market purchases them from businesses generating revenue. In this case money flows from firms to households green arrow in the diagram below in the form of wages in exchange for labour interests for capital and rent for the use of land. Here s how it works. In this way money flows in a circular manner from the business sector to the household sector and from the household sector to the business sector in the economy.
