Circular Flow of the Macroeconomy

Circular flow represents transactions within an economy.

• Product Market
• The place where goods and services are produced by businesses
• Factor Market
• The place where households sell resources, and businesses buy resources
• Ex: Rent/Land and Higher workers
• Firms
• Organizations that produce goods and services for sale.
• Household
• Person, or group of people that share their income
• Money and Goods and Services flows are clockwise