BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The circular flow model illustrates how market forces determine the overall shape of the economy. Businesses and households act as both buyers and sellers in the economy.

Detailed explanation-2: -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.

Detailed explanation-3: -The circular flow model of the economy distills the idea outlined above and shows the flow of money and goods and services in a capitalist economy.

Detailed explanation-4: -In economics, the circular flow diagram represents the organization of an economy in a simple economic model. This diagram contains, households, firms, markets for factors of production, and markets for goods and services.

Detailed explanation-5: -The circular flow model is an economic model that presents how money, goods, and services move between sectors in an economic system. The flows of money between the sectors are also tracked to measure a country’s national income or GDP, so the model is also known as the circular flow of income.