Circular Flow
Notes from (1/27/16)
Circular Diagram- Represents transactions in an economy
Theres 2 Main Markets:
1. Product Market: Where households buy resources and firms sell resources
-Always has goods and services flowing through
2. Resource/Factor Market: Where firms buy resources and households sell resources
-Examples- Land, Labor, Capital, and Entrepreneurship
-Firms: Organization that produces goods and services for sale, Sells finished products to households
-Households: Person or group of people that share their income, Sells factors of production to businesses
-JaelyNoTainted
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