11+ In The Circular Flow Model. The circular flow model demonstrates how money moves through society. Breaking down circular flow diagram.
Government pays 2.8 million employees $9.7 billion a year for their labor. When households need a good or service, their money flows to the product market in a process called consumer spending. Investment is an injection into the circular flow.
In our economic system there are two sectors the business sector and the household sector.
11+ In The Circular Flow Model. In the structure of a mixed economy, the government may participate in the flow of economic activity in many different ways. Those resources include land, labor, capital, and entrepreneurship. In addition, there are transactions that take place between the firms, but these are. Circular flow diagram is a visual model of the economy that shows how dollars flows through markets among households and firms.