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Circular Flow Terms

The Circular Flow of the Economy : Copy the chart below onto your paper, then place the terms on the next slide in the appropriate place. Circular Flow Terms. Product Markets Factor Markets Households (Consumers) Firms/Businesses (Producers) Goods & Services Goods & Services.

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Circular Flow Terms

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  1. The Circular Flow of the Economy: Copy the chart below onto your paper, then place the terms on the next slide in the appropriate place.

  2. Circular Flow Terms • Product Markets • Factor Markets • Households (Consumers) • Firms/Businesses (Producers) • Goods & Services • Goods & Services • Factors of Production • Factors of Production • Income • Profit • Payments • Spending

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  4. Factor Markets $ Income from Sale of factors (gross and net) $ Payments for factors Factors of Production Factors of Production Land, labor, capital, entrepreneurship Land, labor, capital, entrepreneurship Individuals/ Consumers/Households Businesses/ Firms/ Producers Goods and services Goods and services $ Consumer Spending $ Profit (gross and net) Product Markets

  5. 1-5 are examples of transactions on the circular flow of the economy. For each example indicate in which quadrant/action of the CFE the transaction occurs. (Use your notes for help) • David buys a CD at the local store for $9.99. • Emily earns $6.50 per hour entering data at the music conservatory. • Jagdish receives $15,000 in profits from his half-ownership of a coffee shop. • Keisha makes decorative pillows that she sells for $30.00. • Mammoth Toys Inc. hires 100 new employees.

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