Circular Flow Model (01/26/17)

Circular Flow Model

It represents the transactions in an economy by flows around a circle.

1. Households- a person or a group of people who share in income.

2. Firm or Business- an organization that produces goods and services for sale.

For better understanding:
http://2012books.lardbucket.org/books/theory-and-applications-of-macroeconomics/s20-16-the-circular-flow-of-income.html