Principles of Macroeconomics / Unit 1 MAC 0012 short lesson, about 20 seconds
The Circular Flow
Captions available
The idea
The circular flow puts households and firms in two markets. In the goods market firms sell and households buy; in the factor market households sell labor and receive wages.
In practice
Goods travel one way around the circle and payments travel the other.
Where people slip
This version has two sectors only. Unit three adds government and the rest of the world.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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