Circular Flow Model

Businesses provide government with...

• taxes
• sales
• private goods & services
• interest

What do governments provide for the market?

• private goods & services
• public goods & services

In terms of resources, what do households provide for businesses?

• loans
• savings
• labor
• private goods

In terms of products, what do businesses provide for households?

• private goods
• public goods
• sales
• income

In terms of resources, what do businesses provide for households?

• income
• sales
• taxes
• private goods

In terms of products, what do households provide for businesses?

• sales
• taxes
• private goods
• savings

What do banks provide for households & businesses?

• interest payments
• savings
• sales
• public services

What do businesses & households provide for banks?

• savings
• loans
• mortgages
• private services

T/F: Markets tend to circulate resources, goods, & money through the four sectors of the economy continuously.

• True
• False

The Circular Flow model proves that the sectors of the economy are...

• independent
• dependent
• interdependent
• round