On page 2a in the textbook, is a diagram of the Circular Flow model of the economy.

• What does it show us about how the economy works?
• Someone/thing is missing from the diagram. Who/what might that be, and what is their role in the economy?

Aa circular flow model: A model that concisely describes how goods, services, resources, and money flow back and forth ) ) in an economy. CIRCULAR FLOW MODEL Costs Monetary Payments Resource Market Inputs in Land Income Monetary Payments Production Labor Capital Entrepreneurial Ability IIIII Revenue Goods and Goods and Monetary Payments Services Services Product Market Monetary Payments Expenditure