Circular Flow Model

Circular Flow Model The flow chart illustrates the Circular Flow Model of economic activity. This involves the flow of goods from the Resource Market (at the top) to Households (right). The Resource Market has goods that Households sell and Businesses buy. Households sell resources and buy products. On the bottom is the Product Market. Businesses sell products and Households buy. Finally on the left is Businesses. Business buy resources and sell product. The flow of goods being bought or sold flows in this circular flow and powers the economy.