Q2Managerial Economics & Financial Accounting
Question
2 marks
Draw circular flow of economic activities.
Answer
The circular flow model shows the exchange of money and goods between households and firms.
The Circular flow of economic activities is a model showing how money, goods, and services flow between sectors in an economy (e.g., Households provide factors of production to Firms; Firms provide finished goods back to Households; Money flows in the opposite direction).