Circular Flow Model of a Market Economy

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Gold Jodie
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Circular Flow Model of a Market Economy

Postby Gold Jodie » 01 March 2017

I'm currently a freshman that's taking microeconomics in effort to becoming a business major. My question is, how are households providing wages and rent, when they're the ones paying it. Isn't the firms providing the wages and rent via income in exchange for the labor provided by households? Sorry Still trying to understand all of this thoroughly.

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Re: Circular Flow Model of a Market Economy

Postby TonyJ » 28 March 2017

Government is essential to a functioning market but it can go too far in certain aspects. However, mostly the US government doesn't go far enough like allowing Captive markets like cable and satellite companies where there is a choice between getting substandard service at a high market rate or being a cord cutter.

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