Circular Flow Diagram

What role do firms play in the circular flow of the economy?

• Provide labor and taxes

• Produce goods and services

• Collect savings from households

• Import and export goods

Financial institutions facilitate the flow of money by accepting savings and providing loans.

• True

• False

The flow of money from households to firms in exchange for goods and services is called ______.

How does the government support firms in the circular flow?

The primary interaction of Household.

• Pay taxes to the government

• Sell goods and services to households

• Regulates and spends on public goods

The primary interaction of firms.

• • Pay taxes to the government

• • Sell goods and services to households

• • Regulates and spends on public goods

The Government's primary interaction.

• 
  

• • Pay taxes to the government

• • Sell goods and services to households

• • Regulates and spends on public goods

What is the role of financial institutions in the circular flow of the economy?

• Produce goods and services

• Collect taxes from households

• Facilitate savings and provide loans

• Regulate economic activities

How does the foreign sector interact with firms in the circular flow model?

The movement of goods and services from firms to households is called ______.