1.3 Basic circular flow

Front

Interdependence

Back

mutual reliance between two or more sectors/groups in an economy

Front

Household Sector

Back

A group of consumers living under the same roof who use goods and services.

Front

Producers Sector

Back

creates/ makes/ provides goods and services and sells them in exchange for money.

Front

Money Flows

Back

Consumer spending, wages/salaries

Front

Real Flows

Back

Goods, services, labour

Front

Households rely on producers

Back

for goods/services

Front

Producers rely on households

Back

for labour

Front

Producers rely on households

Back

to buy goods and services.