a) Circular flow of income
a) the circular flow of income
circular flow of income → the directions of money flow between households and firms in an economy
households own the factors or production
they supply land, labour, capital, and enterprise to firms
they receive rent for land, wages for labour, interest for capital, and profit for enterprise
firms purchase the factors of production
they produce and supply goods and services to households
they receive revenue from household expenditure on these goods and services