summary-circle-flow - inputs into the firms through...

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Houses buy goods and services and sell factors of production (labor land and capital) Firms sell goods and services and hire and use factors of production (labor land and capital) Firms through wages rent and profits export money into the markets for factors of production and into households Households export money into the markets for goods and services (Spending) which
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Unformatted text preview: inputs into the firms through revenue. I own a piece of land rent it to a firm. That firm pays me rent (income) and I use that income to buy goods and service that the firm has used the piece of land to produce. They take that money and hire someone who uses that money to spend on goods and services that the firm has hired someone to perform....
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This note was uploaded on 04/24/2008 for the course ECON Intro-micr taught by Professor Alexander during the Spring '08 term at University of Houston.

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