Date post: | 22-Dec-2015 |
Category: |
Documents |
Upload: | randall-sullivan |
View: | 215 times |
Download: | 0 times |
How money changes hands!
In the Circular Flow Model there are 2 groups:Households (the people)Firms (companies and businesses)
Households need goods and services so they give their money to the firms.
Firms then give the goods and services to the households.
Household
Firms
Money given to
firms
Goods and
services given to househol
ds
Resources that firms need include labor, capital and land.
These are supplied by the households in exchange for their salary or wages!
Household
FirmsMoney
given to househol
ds
Resources given to firms
Household
Firm
Money given to
firms
Goods and
services given to househol
ds
Money given to househol
ds
Resources given to firms