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2 January, 07:50

In which of the flows in circular flow model does each transaction occur. you buy a coffee at starbucks. ▼ the government buys some dell computers. ▼ a student works at kinko. ▼ a real flow from households through factor markets to firms a real flow from firms through factor markets to households a money flow from households through goods markets to firms donald trump rents a building to marriot hotels. ▼ a real flow from households through factor markets to firms a money flow from firms through factor markets to firms a money flow from firms through goods market to households you pay your income tax?

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  1. 2 January, 09:06
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    This is circular flow model with three agents; customers, governments and businesses.

    There are two markets; Goods and services market and factor market.

    The two types of transaction are resources or monetary transaction.

    ▼ you buy a coffee at starbucks : It is a trade between companies, households with commodities and households. This is achieved via the demand for goods and services.

    ▼ the government buys some dell computers : This is the exchange of the money market between the government and goods and services. Assets are transferred from government to market for goods and services.

    ▼ a student works at kinko : The transaction includes the demand element from the household to the resource sector. It is a financial transaction between companies and households.

    ▼ donald trump rents a building to marriot hotels: It is a monetary transaction across the factor network from business to households. This is indeed a resource transaction between households and companies via the factor market.

    ▼you pay your income tax : This is indeed a money transaction between households and government.
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