chapter2-1

chapter2-1 - Chapter 2 Circular Flow Economy Private and...

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Unformatted text preview: Chapter 2 Circular Flow Economy Private and Public Sectors Circular Flow Product Market Good and Services Resource Market Land, Labor, Capital, Skills Households offer their resources in the resource market for hire. Circular Flow Product Market Good and Services Resource Market Land, Labor, Capital, Skills Households offer their resources in the resource market for hire. Firms use the resources to produce goods and services in the Product Market for households Circular Flow Product Market Good and Services Resource Market Land, Labor, Capital, Skills Households receive, Wages, Rents, Interest, Profits. Firms Pay income to households for the use of their resources Circular Flow Product Market Good and Services Resource Market Land, Labor, Capital, Skills Households receive, Wages, Rents, Interest, Profits. Firms Pay income to households for the use of their resources Households use the income to purchase goods and services, providing revenues to the firms. Circular Flow Product Market Resource Market Income Government is part of the Picture Taxes and Regulations, Public goods Spending Rest of the world Structure of the Economy • Who owns the factors of production?...
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chapter2-1 - Chapter 2 Circular Flow Economy Private and...

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