Question

explain the circular flow of income
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Answer 1

Answer:

The circular flow model demonstrates how money moves through society. Money flows from producers to workers as wages and flows back to producers as payment for products. In short, an economy is an endless circular flow of money. ... For that reason, the model is also referred to as the circular flow of income model.

Answer 2

$\sf\red{Explain \: the \: circular \: flow \: of \: income}$

⟹ The circular flow of income shows the flow of money from economic activity between households and firms.

⟹ Households receive payments for their services (income) and use this money to buy the output of firms consumption.