Diffe rent versions of the model sequentially combined the four sectors-household, business, government, and foreign-and the three markets-product, resource, and financial-into increasingly more comprehensive representations of the economy. The circular flow model is a fundamental representation of macroeconomic activity among the major players in the economy-consumers, producers, government, and the rest of the world.
The circular flow model provides a easy way of getting the "big picture" and of seeing how the key parts of the macroeconomy fit together. In particular, the circular flow is a model of the continuous production and consumption interaction among the four major sectors of the macroeconomy-household, business, government, and foreign-using the three macroeconomic markets-product, resource, and financial. You buy some pasta noodles, a jar of alfredo sauce, and a frozen package of bite-sized shrimp at the store, then use a little bit of your time and effort to prepare a tasty Italian meal.ĬIRCULAR FLOW: A model of the continuous movement of production, income, and the services of scarce resources that flow between producers and consumers. Probably the most common example is cooking a meal. In other words, while you might buy stuff from the store, you often need to do something to it before it's ready to use. HOUSEHOLD PRODUCTION: The creation of satisfaction using both goods purchased in markets and the uncompensated efforts of consumers. AmosWEB means Economics with a Touch of Whimsy!
0 kommentar(er)
