W1_Circular Flow of Goods and Payments

ECCON

What do households supply?

Labor

What do households receive from firms?

Income

What do households spend on?

Consumption goods

Where do households save?

Financial market

What do households pay to government?

Net taxes

What do firms demand from households?

Inputs

What do firms pay for inputs?

Wages

What do firms produce?

Output

Where do firms sell output?

Goods market

What do firms receive from sales?

Revenue

What do firms spend on for growth?

Investment goods

What is the market for labor/capital called?

Factor market

Where are goods and services sold?

Goods market

What connects savings to investments?

Financial market

What does government collect?

Net taxes

What does government spend on?

Public goods

Where does government buy from?

Firms

Where does government borrow from?

Financial market

What are government purchases called?

Government spending

What do households do in financial market?

Save

What do firms get from financial market?

Loans

What do governments get from financial market?

Borrowing

What flows from firms to households (factor market)?

Income

What flows from households to firms (goods market)?

Consumption

What flows from firms to goods market?

Output

What flows from households to government?

Taxes

What flows from government to firms?

Purchases

What flows from financial market to firms?

Loans