Circular flow diagram with three sectors: households, business firms, financial markets, and the government

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Circular flow diagram with three sectors: households, business firms, financial markets, and the government

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Step 1: Define house hold sector

It can be defined as a term that represents individuals or families who supply factors of production which encompasses labor, land, and capital to the different kinds of businesses in the economy and receive income in return for the work in those businesses. The income that an individual gets includes wages, rent, and interest.

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