Money and Products Circular Flow
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Money and Products Circular Flow

Factor Market- Households sell- Firms buyBusinesses- Buy factors of productions- Sell productsProduct Market- Firms sell- Households buyHouseholds- Sell factors of production- Buy productsFactors of productionCostsGoods and servicesRevenueLabour, land, capital, entrepreneurial abilityMoney income (wages, rents, interest, profits)Goods and servicesConsumption expenditures
publish time: 2021-06-29

Here is another example that shows the flow of money and products in the economy. The business that generates the products and services supplies them to the households while the households provide those businesses with the business's basic requirements like labor, land. The household's expenditure for availing a service goes back to the household itself as a form of rent or wages.

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