1. In a short paragraph, explain what the circular flow chart is. Then, explain how the chart works. Be sure to include an example of how households and firms rely
on each other. You can use the picture below to help you. (You do not need to
include the government's role in the flow chart unless you want to)
Goods and services
Consumer expenditure
n
Wages, rent, dividends
Households
Firms
Factors for production