What Is Involved In The Circular Flow Model? The circular flow model demonstrates how money moves from producers to households and back again in an endless loop. In an economy, money moves from producers to workers as wages and then back from workers to producers as workers spend money on products and services. Which of
Why Does The Free Market System Follows A Circular Flow Model? Which best explains why the free-market system follows a circular-flow model? Free choices made by consumers and producers influence each other. How does a free-market system have a circular flow of influences? Which best explains how a free-market system has a circular flow of
How Does Demand Influence The Circular Flow Model? The circular flow model shows that goods and services that households demand are supplied by firms in product markets. … Moreover, a change in equilibrium in one market will affect equilibrium in related markets. For example, an increase in the demand for haircuts would lead to an