Presentation deals with circular flow of money in Three Sector economy. It is a simple graphical representation to make circular flow easy to understand.

3. Three Sector Money Flow

5. Circular Flow
– Production & Household Sector
1. Factor of production like land, labor, capital and entrepreneur
flow from household to industry
In return production sector gives rent, wages, interest and
profit to household sector
2. Once production is done, goods and services are sold to
household sector
For these goods and services, household sector makes
consumption expenditure.
– Household Sector & Government Sector
• Household sector receives transfer payment from
government and pays taxes to government
– Production & Government Sector
• Production sector receives subsidies from government and
pays taxes to government sector.
Neeti Gupta