circular flow model

Definition

A simple economic model illustrating the flow of goods and services though the economy. In the model, producers are termed as "firms" while consumers are referred to as "households." Firms supply goods and services while households consume these goods and services. Factors of production (land, labor, capital) are supplied by the household to firms and the firms convert these into finished products for household consumption.

Use circular flow model in a sentence

Related Videos




http://www.businessdictionary.com/definition/circular-flow-model.html

Have a question about circular flow model? Ask for help in the
Community
advertise here

Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z