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  • Three Sector Circular Flow

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    Zainab
    11 views24 pages
    The document outlines the circular flow of payments between households, businesses, and the government in an economy. It shows how households receive income from businesses in exchange for labor, and then households use that income to purchase goods and services from businesses. Businesses also make payments to factors of production like labor. The government collects taxes from households and businesses and provides transfer payments and subsidies. It also shows how savings, loans, interest payments, imports, and the foreign sector interact within the circular flow.

    Original Description:

    Economic circular flow comprehensive view

    Original Title

    Three sector circular flow

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    The document outlines the circular flow of payments between households, businesses, and the government in an economy. It shows how households receive income from businesses in exchange for labor, and then households use that income to purchase goods and services from businesses. Businesses also make payments to factors of production like labor. The government collects taxes from households and businesses and provides transfer payments and subsidies. It also shows how savings, loans, interest payments, imports, and the foreign sector interact within the circular flow.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    11 views24 pages

    Three Sector Circular Flow

    Uploaded by

    Zainab
    The document outlines the circular flow of payments between households, businesses, and the government in an economy. It shows how households receive income from businesses in exchange for labor, and then households use that income to purchase goods and services from businesses. Businesses also make payments to factors of production like labor. The government collects taxes from households and businesses and provides transfer payments and subsidies. It also shows how savings, loans, interest payments, imports, and the foreign sector interact within the circular flow.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 24

    •

    •
    •
    Services
    Services Factor
    Wages Market Wages

    Household Business
    Sector Sector

    Product Profit
    Expenditure
    Market Goods & Services
    Goods & Services
    •

    PRODUCT MARKET :

    • A MARKET WHERE FINAL GOODS AND SERVICES ARE BOUGHT AND SOLD
    Factor Services
    Services
    Wages Market
    Wages

    Government
    Household Business
    Sector Sector

    Profit
    Expenditure Product
    Market Goods & Services
    Goods & Services
    Factor Services
    Services
    Wages Market
    Wages

    Tax Tax

    Government
    Household Business
    Sector Sector

    Profit
    Expenditure Product
    Market Goods & Services
    Goods & Services
    Services Factor Services
    Market
    Wages Wages

    Tax Tax
    Transfer Payments, Subsidies, Payment
    Factor payments,
    Government for purchases
    Household Business
    Sector Sector

    Profit
    Expenditure Product
    Market Goods & Services
    Goods & Services
    Factor Services
    Services
    Wages Market
    Wages

    Tax Tax
    Transfer Payments Subsidies, Payment for
    Government purchases

    Household Business
    Sector Sector

    Profit
    Expenditure Product
    Market Goods & Services
    Goods & Services
    Factor Services
    Services
    Wages Market
    Wages

    Tax tax
    Transfer Payments Subsidies, payment
    Government for purchases

    Household Business
    Sector Sector

    Profit
    Expenditure Product
    Market Goods & Services
    Goods & Services
    Factor Services
    Services
    Wages Market
    Wages

    Tax Tax
    Transfer Payments Subsidies, payment for
    Government purchases

    Savings

    Savings Savings

    Household Business
    Sector Sector

    Product Profit
    Expenditure
    Market
    Goods & Services Goods & Services
    Factor Services
    Services
    Wages Market
    Wages

    Tax Tax
    Transfer Payments Subsidies, payment for
    Government purchases
    Savings
    Loan

    Savings Savings

    Household Loan Loan Business


    Sector Sector

    Product Profit
    Expenditure
    Market
    Goods & Services Goods & Services
    Factor Services
    Services
    Wages Market
    Wages

    Tax Tax
    Transfer Payments Subsidies, payment for
    Government purchases
    Savings,
    Loan
    Interests

    Savings , Interests Savings , interests

    Household Loan Loan Business


    Sector Sector

    Product Profit
    Expenditure
    Market
    Goods & Services Goods & Services
    o
    o o
    o
    Services Factor Services
    Wages Market
    Wages

    Tax Tax
    Transfer Payments Subsidies, payment for
    Government purchases

    Savings
    Loan Interest

    Household Business
    Sector Sector

    Loan Loan
    Savings/interest Savings/interest
    Product Profit
    Expenditure
    Goods & Services Market Goods & Services
    Services Factor Services
    Wages Market
    Wages

    Tax Tax
    Transfer Payments Subsidies, Payment
    Government for purchases

    Savings
    Loan Interest
    Foreign Sector

    Household Business
    Sector Sector

    Loan Loan
    Savings/interest Savings/interest
    Product Profit
    Expenditure
    Goods & Services Market Goods & Services
    Services Factor Services
    Wages Market
    Wages

    Tax Tax
    Transfer Payments Subsidies, payment
    Government for purchases

    Payments for
    imports

    Savings
    Loan Interest
    Foreign Sector

    Household Payment for Business


    imports
    Sector Sector

    Loan Loan
    Savings/interest Savings/interest
    Product Profit
    Expenditure
    Goods & Services Market Goods & Services
    Services Factor Services
    Wages Market
    Wages

    Tax Tax
    Transfer Payments Subsidies, payment for
    Government purchases

    Payments for Receipts from


    imports exports

    Savings
    Loan Interest
    Foreign Sector
    Payment for factor
    Household services
    Payment for Business
    imports
    Sector Sector

    Loan Loan
    Savings/interest Savings/interest
    Product Profit
    Expenditure
    Goods & Services Market Goods & Services
    ➢
    ➢

    ➢
    ➢

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