Economic Circular Flow

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Presentation transcript:

Economic Circular Flow CE.12b

Questions How do resources, goods and services, and money flow among individuals, businesses, and governments in a market economy?

Economic Circular Flow Resources, goods and services, and money flow continuously among households, businesses, and markets in the United States economy.

Economic Circular Flow Individual and business saving and investment provide financial capital that can be borrowed for business expansion and increased consumption. Individuals (households) own the resources used in production, sell the resources, and use the income to purchase products.

Economic Circular Flow Businesses (producers) buy resources; make products that are sold to individuals, other businesses, and the government; and use the profits to buy more resources.

Economic Circular Flow Governments use tax revenue from individuals and businesses to provide public goods and services.

Review Explain the circular flow that shows how consumers (households), businesses (producers ), and markets interact. http://www.youtube.com/watch?v=_PKH2wtDT3E

Vocabulary