The circular flow model shows the continuous movement of money between households, businesses, and the government. Households sell factors of production like labor to businesses and receive income to buy goods and services, paying some money in taxes to the government. Businesses take those factors of production to produce goods and services, selling to households and paying taxes. The government uses tax revenue to provide public services and goods back to households and businesses.

1. The circular flow
An closed circular flow

2. participants
•Household

3. Household
• Household are the backbone of the economy
• The sell their FOP to the factor market and receive remuneration and
buy goods and services in the services market.
• Pay tax to the government

4. Government
• Government

5. Government
• Government provide public services and goods
• It receives tax from the household and the business

6. business

7. Business
• Business produces goods and services
• The business buy the FOP from the factor market
• Pay tax to the government

8. Market in the circular flow
• Factor market
The market for factors of production
(capital,land.labour,entrepreneurship)
Goods and services market
The market that sell and buys the consumable goods and services

9. reference
• jajanShetter
• Greggar Donven Valdehueza
• Marvin Morales