The Economic Circular Flow and Financial Capital in a Market Economy

Slide1CE.12b

Slide2Questions How do resources, goods and services, and money flow among individuals, businesses, and governments in a market economy?

Slide3Economic Circular Flow Resources, goods and services, and money flow continuously among households, businesses, and markets in the United States economy.

Slide4Economic Circular Flow Individual and business saving and investment provide financial capital that can be borrowed for business expansion and increased consumption.  Individuals (households) own the resources used in production, sell the resources, and use the income to purchase products.

Slide5Economic Circular Flow Businesses (producers) buy resources; make products that are sold to individuals, other businesses, and the government; and use the profits to buy more resources.

Slide6Economic Circular Flow Governments use tax revenue from individuals and businesses to provide public goods and services.

Slide7Review Explain the circular flow that shows how consumers (households), businesses (producers ), and markets interact.  http://www.youtube.com/watch?v=_PKH2w tDT3E

Slide9Vocabulary