Economics in news. Business & Marketing Research Paper

Economic News
Name
Institution
Course
Date
ECONOMIC NEWS
The Circular-Flow Model of the Economy
Beggs (2018), the circular flow model is one of the most important models that is taught in economics. This is a model that is used to describe the flow of money and goods all over the economy in a very simple manner. The economy can be viewed in two cycles moving in reverse courses. In one direction, goods and services are flowing from the people to businesses and back again (Beggs, 2018). Through this illustration, an individual can apprehend why laborers go to work to produce goods and services required by people. On the other direction, there is money that is flowing from the businesses to the households. This is a continuous cycle. It demonstrates how income earned by people from work is used to cater for things that people need. People use the income to pay rent, buy household stuff among other things.
These cycles are very imperative in the economy because people buy goods and pay money. People go to work to get money so that they can purchase some necessities like food and clothing. This model also demonstrates the circular flow of income between the business sector and the household sector. Households buy goods and services which are produced by businesses in the product market. Beggs (2018), asserts that businesses need resources so that they can be able to make goods and services available. Additionally, various households do provide labor to these businesses via the resource market. In return, businesses will transform these resources into goods and services.
The article also illustrates how the market is categorized into two categor...