Circular flow model represents the flow of money ,Goods and services.
- Factor market (resources)- Market where factors of production are bought and sold.
- Product market ( goods)- where goods and services are bought and sold
- households- a person or a group that share income
- Firm-organization that produces goods and services for sell.
Types of Markets
- Traditional economic system in which decisions are made upon belief,customs and religion. Ex: most places in Africa
- Communist: economy is under the governments control: the government answers all questions about the economy. Ex: Cuba
- Mixed economy: mixed some government involvement with the economy and private. Ex: USA
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