41 in the simple circular-flow diagram
In the simple circular-flow diagram, the participants in the economy are a.firms and government. b.households and firms. c.households and government. The circular flow model shows where money goes and what it’s exchanged for. The model includes households, businesses and governments. We also have the banking system that facilitates the exchange of money and, as we’ll see in a minute, helps to productively turn savings into investment in order to grow the economy. In the simple circular flow diagram, households FILTER SETS 104 Terms mfaanous Circular Flow Diagram Consumption Spending investment spending national income total spending by houesholds on newly produced g/s in one year firms purchases of newly produced capital equipment in one year sum of all wages, salaries, interest, rent, and profit in one… In the simple circular-flow diagram