AP Macroeconomics The Circular Flow of Economic Activity.
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Transcript of AP Macroeconomics The Circular Flow of Economic Activity.
![Page 1: AP Macroeconomics The Circular Flow of Economic Activity.](https://reader036.fdocuments.in/reader036/viewer/2022082610/56649d995503460f94a83c41/html5/thumbnails/1.jpg)
AP Macroeconomics
The Circular Flow of Economic Activity
![Page 2: AP Macroeconomics The Circular Flow of Economic Activity.](https://reader036.fdocuments.in/reader036/viewer/2022082610/56649d995503460f94a83c41/html5/thumbnails/2.jpg)
Circular Flow Concepts
Households – suppliers of the factors of production & demanders of goods and services
Government – providers of public goods and services & demanders of both private goods and services and the factors of productionBusinesses / Firms – suppliers of goods and services &
demanders of the factors of production
Factor Market – where the factors of production are exchanged
Product Market – where goods and services are exchanged
![Page 3: AP Macroeconomics The Circular Flow of Economic Activity.](https://reader036.fdocuments.in/reader036/viewer/2022082610/56649d995503460f94a83c41/html5/thumbnails/3.jpg)
Product Market
Factor Market
Households Government Businesses / Firms
>>$ taxes $>>>
<<$ taxes $<<
>>>factors of production>>>
<<<public goods<<<
>>>public goods>>>
<<$ factor payments $<<
<<<goods & services<<<>>$ government spending $>>