The Circular Flow Model helps us see how families and businesses interact in an economy. Let’s break it down:
Families provide important things that businesses need:
Businesses pay families for these things. This creates money for the families.
Families then use this money to buy products and services from businesses.
This process keeps happening over and over. Money and resources move back and forth, which helps the economy stay lively and balanced.
It’s like a dance where each partner needs the other!
The Circular Flow Model helps us see how families and businesses interact in an economy. Let’s break it down:
Families provide important things that businesses need:
Businesses pay families for these things. This creates money for the families.
Families then use this money to buy products and services from businesses.
This process keeps happening over and over. Money and resources move back and forth, which helps the economy stay lively and balanced.
It’s like a dance where each partner needs the other!