Boulding's Circular Flow Model

Boulding's Circular Flow Model illustrates how resources, goods, services, and money move continuously between different parts of the economy. It shows how households provide labor and sell products to businesses, which in turn pay wages and sell goods. The model highlights the ongoing exchange of money for goods and services and how these flows create an economy's overall activity. It emphasizes the interconnectedness of consumers and producers, demonstrating that economic activity is a circulation rather than a one-time event, maintaining balance and sustaining growth within the economy.