circular flow model the circular flow model describes and shows how the economy interacts. factor...
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![Page 1: Circular Flow Model The Circular Flow Model describes and shows how the economy interacts. FACTOR MARKET Where you get your 4 factors of production to](https://reader036.vdocument.in/reader036/viewer/2022062515/56649f475503460f94c6934f/html5/thumbnails/1.jpg)
Circular Flow ModelThe Circular Flow Model describes
and shows how the economy interacts.
FACTOR MARKET
Where you get your 4 factors of
production to make your goods and
services
PRODUCT MARKET
Where you buy your finished goods and
services for use
![Page 2: Circular Flow Model The Circular Flow Model describes and shows how the economy interacts. FACTOR MARKET Where you get your 4 factors of production to](https://reader036.vdocument.in/reader036/viewer/2022062515/56649f475503460f94c6934f/html5/thumbnails/2.jpg)
Business and Companies
Get the 4 factors of production from the Factor Market and
sale products in the Product Market.
Households
Provide 4 factors of production to the Factor Market and buy products from
the Product Market.
![Page 3: Circular Flow Model The Circular Flow Model describes and shows how the economy interacts. FACTOR MARKET Where you get your 4 factors of production to](https://reader036.vdocument.in/reader036/viewer/2022062515/56649f475503460f94c6934f/html5/thumbnails/3.jpg)
• HOUSEHOLDS provide the factor market with the four factors of production.– Land
•Labor–Capital
»Entrepreneurship
• In return, they receive income in the from:– Rent
•Wages– Interest
»Profit
![Page 4: Circular Flow Model The Circular Flow Model describes and shows how the economy interacts. FACTOR MARKET Where you get your 4 factors of production to](https://reader036.vdocument.in/reader036/viewer/2022062515/56649f475503460f94c6934f/html5/thumbnails/4.jpg)
• Businesses spend $$$ (costs) in the factor market to get the 4 factors of production to make goods and services.
• In return, businesses receive the land, labor, capital and entrepreneurship to make goods and services.
![Page 5: Circular Flow Model The Circular Flow Model describes and shows how the economy interacts. FACTOR MARKET Where you get your 4 factors of production to](https://reader036.vdocument.in/reader036/viewer/2022062515/56649f475503460f94c6934f/html5/thumbnails/5.jpg)
• Businesses make goods and services with their resources and supply it to the product market.
• In return, businesses get revenue for supplying their goods and services.
![Page 6: Circular Flow Model The Circular Flow Model describes and shows how the economy interacts. FACTOR MARKET Where you get your 4 factors of production to](https://reader036.vdocument.in/reader036/viewer/2022062515/56649f475503460f94c6934f/html5/thumbnails/6.jpg)
Households
• Households spend money in the product market.
• In return, households get the goods and services they want and need.
![Page 7: Circular Flow Model The Circular Flow Model describes and shows how the economy interacts. FACTOR MARKET Where you get your 4 factors of production to](https://reader036.vdocument.in/reader036/viewer/2022062515/56649f475503460f94c6934f/html5/thumbnails/7.jpg)
BusinessesHouseholds
Factor Market
Product Market
![Page 8: Circular Flow Model The Circular Flow Model describes and shows how the economy interacts. FACTOR MARKET Where you get your 4 factors of production to](https://reader036.vdocument.in/reader036/viewer/2022062515/56649f475503460f94c6934f/html5/thumbnails/8.jpg)
BusinessesHouseholds
Factor Market
Product Market
4 factors of production
Rent, Wages, Interest , & Profit
![Page 9: Circular Flow Model The Circular Flow Model describes and shows how the economy interacts. FACTOR MARKET Where you get your 4 factors of production to](https://reader036.vdocument.in/reader036/viewer/2022062515/56649f475503460f94c6934f/html5/thumbnails/9.jpg)
BusinessesHouseholds
Factor Market
Product Market
4 factors of production
Rent, Wages, Interest , & Profit
Resources
Costs
![Page 10: Circular Flow Model The Circular Flow Model describes and shows how the economy interacts. FACTOR MARKET Where you get your 4 factors of production to](https://reader036.vdocument.in/reader036/viewer/2022062515/56649f475503460f94c6934f/html5/thumbnails/10.jpg)
BusinessesHouseholds
Factor Market
Product Market
4 factors of production
Rent, Wages, Interest , & Profit
Resources
Costs
Revenue
Goods and Services
![Page 11: Circular Flow Model The Circular Flow Model describes and shows how the economy interacts. FACTOR MARKET Where you get your 4 factors of production to](https://reader036.vdocument.in/reader036/viewer/2022062515/56649f475503460f94c6934f/html5/thumbnails/11.jpg)
BusinessesHouseholds
Factor Market
Product Market
4 factors of production
Rent, Wages, Interest , & Profit
Resources
Costs
Revenue
Goods and Services Goods and Services
Consumer
Spending
![Page 12: Circular Flow Model The Circular Flow Model describes and shows how the economy interacts. FACTOR MARKET Where you get your 4 factors of production to](https://reader036.vdocument.in/reader036/viewer/2022062515/56649f475503460f94c6934f/html5/thumbnails/12.jpg)
Ticket Out The Door Questions!!!
You may use your notes1. The factors of production are bought and
sold in the ___________ market.2. Goods and services are bought and sold in
the ___________ market.3. In the circular flow model, ____________ buy
the factors of production from _____________.4. Households and businesses pay ___________
to the government in exchange for goods and services.