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The Magic of the Economy

Circular Flow of the Economy

Circular Flow of the Economy

Economics provides an accessible foundation for understanding the complexity of the interactions in the world. For example, the circular flow diagram displays the economic framework related to the dynamic interconnectedness of economic agents. In the graph above the display is limited to households and firms but other depictions of circular flow incorporate the government and international trading partners.

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    Boundless vets and curates high-quality, openly licensed content from around the Internet. This particular resource used the following sources:

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    http://upload.wikimedia.org/wikipedia/commons/thumb/b/b8/Circular_flow_of_goods_income.png/350px-Circular_flow_of_goods_income.png CC BY-SA.

Related Terms

  • circular flow
  • externality
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