What is THE CIRCULAR-FLOW MODEL?

 THE CIRCULAR-FLOW MODEL:

The circular-flow model is a simple way to visually show the economic transactions that
occur between households and Arms in the economy.

The circular flow model that depicts the interrelationship between... | Download Scientific Diagram

The circular flow model demonstrates how money moves through society. Money flows from producers to workers as wages and flows back to producers as payment for products. In short, an economy is an endless circular flow of money.

 

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