EconGuru Economics Guide RSS Syndication

Get published on EconGuru.com. Start here!

© Copyright 2006 - 2011 EconGuru.com. All rights reserved. Assets marked and linked to the original sources are hereby used for educational purposes only and are copyrighted by their respective owners.

Subscribe to EconGuru.

Circular flow of income

Subscribe to EconGuru:

Firms and households interact and exchange resources in the big Circular Flow of Income illustrated by the diagram below.

The reciprocal circulation of income between consumers and producers is a simplified version of the big circle of money (resources in this sense) since households provide expenditures (they spend money) and factors of production to firms who provide households goods and services to consume.

Circular flow of income

 

Share This Article:
Meet the Author

Tags

EconGuru Economics Guide

Educating the public since 2006.