Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 2 - Part I - Thinking Like an Economist - Questions for Review: 5


The simplified circular flow of income model doesn't include the role for government or international trade.

Work Step by Step

The simplified model only looks at the private sector: the interaction between households and firms. Households provide labor, which the firms buy. In turn, firms provide goods and services, which households buy.
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