Use examples to distinguish between the resource market and the product market in the circular flow model. As we read this unit, how does the circular flow model illustrate how our economy works?

How does the circular flow model work? What are the two flows in the circular flow model?

What does your household do with its resources and with its income?

How does your household interact in the resource and product markets? In what way is your household both a buyer and a seller in this model?