In a simplified model of an economy, known as a circular flow diagram, households own the factors of production. They sell or lend these factors to firms, which produce goods and services that ...

The circular flow model of ... It separates the markets that these participants operate in as markets for goods and services and markets for the factors of production. ... This diagram shows ...

The circular flow model demonstrates how money moves ... It separates the markets that these participants operate in as markets for goods and services and the markets for the factors of production.