Circular Flow of the Economy

By Mayra & Tahjanai


As a consumer we sell our labor for money to the factor market. We decide how much our labor is worth. The business sector and the government are the ones who buy our labor.
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The Factor Market

The factor market is when a person has an idea or an invention and wants to produce more of there goods or invention. If you sell your labor to the government then you get paid by taxes.


Businesses make products to sell in the product market. They are also considered consumers because they need supplies and material to make the product goods.

Product Market

The product market then sells the goods to the consumer. They also can trade goods to foreign countries.