Explain how the Circular Flow Model for a Market-Oriented
Explain how the Circular Flow Model for a Market-Oriented System?
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A. There are two groups of decision makers in private economy (no government yet):
1. Households
2. Businesses.
The market system coordinates these decisions. Circular flow model illustrates this complex web of decision-making and economic activity that give rise to the real and money flows.
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“In the corn market, demand often exceeds supply and supply sometimes exceeds demand.” “The price of corn rises and falls in response to changes in supply and demand.” Among these 2 statements used correctly which in the terms “supply&rdq
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