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The economy's income and expenditure The following diagram presents a circular-flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the inner set of arrows
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The economy's income and expenditure The following diagram presents a circular-flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs. Markets for Goods and Services Firms Markets for Factors of

User Glend
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Answer:

production.

Step-by-step explanation:

Based on this model, households earn income when firms purchase resources from them. Households own labor (individuals' work) and capital (savings and investments) resources.

Firms earn income when households purchase goods and services from them.

The economy's income and expenditure The following diagram presents a circular-flow-example-1
User Ldrut
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