1. CIRCULAR FLOW DIAGRAM

2. It represents how goods, services and money flow through the economy.
CIRCULAR FLOW DIAGRAM
It represents how goods, services and money flow through the economy.

3. CIRCULAR FLOW DIAGRAM
FIRMS
HOUSEHOLDS
Producers
Consumers

4. Households offer firms ‘factors of production’
Households consume the goods offered by the firms.

5. Role of Households That households need and consume
Offered to firms so that they can make products
LAND
LABOUR
CAPITAL

6. Role of Firms From households Firms take the factors
land
And convert products into goods and services that consumer need and what
labour
capital
From households

7. LAND
HOUSEHOLDS
LABOUR
FACTORS
INCOMES
SPENDINGS
GOODS
CAPITAL
FIRMS