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Circular Flow of Transaction

Circular Flow of
Transactions
An economic model that
illustrates how money
moves from producers to
consumer and back again
in an endless loop.
Resource Market

Four main parts


of the circular
flow of
transaction
Product Market
2 Pers0nal

Households Firms
2 Market
Resource Market
A market where a firm can go to purchase to produce
goods and services

Product Market
Is where individuals go to purchase finished products.
Households
3 scarce resources
 Land
 Labor
 Capital
Firms
2 Market
Resource Market
A market where a firm can go to purchase to produce
goods and services

Product Market
Is where individuals go to purchase finished products.
Resource Market

Firms Households

Product Market

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