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  • Circular Flow Model: Prof. Isidro Apollo G. Valensoy, JR

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    Abdulnasser Nanding Jr.
    28 views5 pages
    The circular flow model shows the continuous flow of goods, services and payments between two main actors in the economy: households and businesses. Households supply factors of production like labor to businesses and receive incomes, then use those incomes to demand goods and services from businesses. Businesses use the factors of production from households to produce goods and services, then sell them to households and derive revenue. This circular flow repeats continuously.

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    ECON - CIRCULAR FLOW

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    The circular flow model shows the continuous flow of goods, services and payments between two main actors in the economy: households and businesses. Households supply factors of production like labor to businesses and receive incomes, then use those incomes to demand goods and services from businesses. Businesses use the factors of production from households to produce goods and services, then sell them to households and derive revenue. This circular flow repeats continuously.

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    © All Rights Reserved
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    28 views5 pages

    Circular Flow Model: Prof. Isidro Apollo G. Valensoy, JR

    Uploaded by

    Abdulnasser Nanding Jr.
    The circular flow model shows the continuous flow of goods, services and payments between two main actors in the economy: households and businesses. Households supply factors of production like labor to businesses and receive incomes, then use those incomes to demand goods and services from businesses. Businesses use the factors of production from households to produce goods and services, then sell them to households and derive revenue. This circular flow repeats continuously.

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    © All Rights Reserved
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    of 5

    CIRCULAR FLOW

    MODEL

    PROF. ISIDRO APOLLO G. VALENSOY, JR.


    CIRCULAR FLOW OF ECONOMIC
    ACTIVITY
    Goods /Services
    Factors of
    Production

    HOUSEHOL BUSINESS
    D SECTOR FIRMS
    Cost of Living Household Income Cost of Production Business Receipts

    Factor Payments

    Consumption
    Expenditures
    CIRCULAR FLOW OF ECONOMIC
    ACTIVITY
    CIRCULAR FLOW OF ECONOMIC
    ACTIVITY
    Goods and Services

    Factors of Production

    HOUSEHOL BUSINESS
    D SECTOR FIRMS

    Savings Investments
    BS
    Taxes Public Expenditures
    GS
    Imports Exports
    FS
    CIRCULAR FLOW OF ECONOMIC
    ACTIVITY
    MONEY FLOW
    RESOURCE
    FLOW OF
    MARKET
    ECONOMIC
    RESOURCES

    HOUSEHOL BUSINESS
    D SECTOR FIRMS

    FLOW OF
    GOODS
    GOODS/SERVICE
    MARKET
    S
    MONEY FLOW

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