A budget constraint is an economic term. 1. Clearly define the model in your own words. Questions to address as you write this portion of the discussion are: How does the model work? . What are the components of the model? . What is the interaction among the components of the model? Provide examples to support your answers. 2. Provide an example you've read about, or taken from your own life experience (personal or professional) where you've had to use one of these three models (circular flow diagram, a budget constraint, or a production possibility frontier) to make a decision. O