In the Circular Flow Model, goods and services are traded between households and businesses in a simple way:

1. Households use their money to buy goods and services from businesses.
2. Businesses sell these goods and services and receive payment to keep their operations running.
3. This exchange creates a back-and-forth flow of resources:
   • Households provide workers (labor) to businesses.
   • Businesses give products and wages (money) back to households.

It’s like a give-and-take that keeps the economy moving!