https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f Insights into Economics: Assignment 2 - By: Micah Villegas en-us 2020-10-29 19:35:07 UTC 2025-12-22 02:41:36 UTC hello@padlet.com micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874759702 The Circular Flow Model helps us comprehend the constant stream of exchanged money between the businesses/firms and households/individuals. In this padlet we'll discover everything there is to know about The Circular Flow Model and how we contribute to the flow of money.]]> 2020-10-29 20:03:36 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874759702 micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874779615 This image displays The Circular Flow Model, making connections between the Product Market, Factor Market, Businesses, and Households. Each one of these players have a role when it come to how they utilize their money/assets as shown in the diagram.]]> 2020-10-29 20:10:48 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874779615 micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874908276 The diagram below demonstrates what a three-sector model of the Circular Flow Model would look like. In this diagram it is slightly different from the first diagram which is traditionally considered the preferred model. This diagram considers the role of the government within the flow of cash/assets.]]> 2020-10-29 21:01:19 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874908276 micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874909655 Within this video, it gives an explanation of the flow of the economy.  This flow has a circular motion that that passes through us as consumers and through the firms; also known as businesses. The economy is constantly shifting because consumers are always adding input/cash to the producers and firms. The money flows back as the businesses/producers provide goods and services to consumers and at the same time provide employment, allowing the flow to circle back to consumers. 

This video helped established the two main roles in a circular flow model: Households/Consumers and Firms/Producers. This did cover the main contributors to the model but this video did not go in-depth about the product market and the factor market. ]]> 2020-10-29 21:01:57 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874909655 micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874910059 I really enjoyed this video as it gives information about how we as consumers continually buy the latest products and gives insights into how products don't have to necessarily turn into waste but could be used for the furtherance of technology and economic growth. It brings to us the importance of repurposing and renewing materials that are being used and allows for the cycle to be more technical cyclic by coming into a full circle.

This video does not show a direct correlation or impact on the circular flow of the economy but it allows us to explore how we could possibly reuse business products to lower cost and connect business by becoming collectively aware of the environmental impact associated with the flow of money. All this allowing the circular flow model to continue for years to come

]]> 2020-10-29 21:02:08 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874910059 micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874910318 This video breaks down and simplifies the circular flow model; it explains that the model is like a matrix that we can see everywhere around us through everything we purchase. Here they explain that the product market is where businesses sell their goods and services to the households. In this video, they refer to the factor market as the resource market. In this market, the households provide the resources divided into 4 major groups land, labour, capital, and entrepreneurship just like the previous video. 

It does a great job explaining that cash, revenue, income, cost flow one way as the resources, goods, and services flow the other way because of the flow of money. Each market has a set of actions but could take place in the same place. An example would be employees working for wages as households/consumers would buy goods.]]> 2020-10-29 21:02:15 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874910318 micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874910584 This has a very in-depth explanation of all the moving parts within the circular flow model and demonstrates it using the story of a man on an island. 

This shows what the households offer to the model in this purpose for the firms. The household provides land, labour, capital, and entrepreneurship to the firm. In return, the firms pay back to the household in wages, land, and building rent. The household being the creator of the firm gives back to the household. 
Then the firms with the resources that they have created goods and services to offer connecting the firm to the household. Within that same path, the household pays for those goods and services. In summary, the households give the firms the "factors of production".]]> 2020-10-29 21:02:22 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874910584 micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874917516 This website defines the Circular Flow Model as a diagram that shows the flow of money within our economy. It brings up the point of many assumptions that must occur so that the model is functional. The role of consumers is their usage of income. Businesses' roles are used to make efficient services and goods. The government's role is the responsibility of legislation for making the market run smoothly.

Within the website, they give examples of each role and its effects on the economy are. It also explains that there are two opposing flows of income.  One way shows the income, consumption expenditure, revenue, and cost flowing one way. The other way shows goods & services in the product market. In the same way land, labour, capital, entrepreneurship and factors of production in the factor market. ]]> 2020-10-29 21:03:26 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874917516 micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874917763 This here is a small presentation about macroeconomics, the circular flow. It covers what importance of the circular flow model and how it could be applied to calculate "Gross Domestic Product".

What's different about this website is that it covers how the foreign sector takes part in this cycle. It shows the connection between the government, household, business, and foreign sector. As shown, the foreign sector connects to the business sector and the household sector. The business sector makes payments for exports and imports with the foreign sector, while the household sector creates payments for importing goods to the foreign sector.]]> 2020-10-29 21:03:33 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874917763 micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874917967 The website covers some key mathematical models that can be derived from the circular flow model, the "gross domestic product" (GDP) that we've already covered and "the income approach". It covers multiple key terms surrounding the circular flow model as well.

The website defines what a "real asset" is and gives great examples of it. The asset wouldn't be a stock or a bond, but it is something that the companies or businesses used for the production of goods and services. When calculating gross domestic product (GDP) the government only counts what they spend on goods and services. It states in an example of how the governments pay for welfare they don't deduct it from their GDP.]]> 2020-10-29 21:03:38 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874917967 micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874918174 The website explains what the circular flow model is and how it ties into economics. It provides an explanation of the 4 factors of production: Labour, Land, Capital, and Entrepreneurs. Also, the relations of Cost, Revenue, and Consumer Spending and other factors that they say are not included in the circular flow model.

What really caught my eye from this website is what it said the circular flow model was missing. In most cases, the circular flow model does not have the government sector and the foreign sector. More importantly, this model is missing the impact of taxes and financial institutions. These are considered to be types of leakages in the economic system. There is not a straight transition of money between the businesses and the households.]]> 2020-10-29 21:03:44 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/874918174 micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/902341005 One thing I hope to pass on to you; the reader, is that I want you to look at your own community through the lens of the circular flow model. With this; try to understand how small or large businesses function and learn to be more conscious when you purchase items. ]]> 2020-11-08 23:38:44 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/902341005 micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/902341213 One real life example of the "Product Market" and "Factor Market" would be any store that has employees, products, and your everyday consumer. The employee would be providing labour and receiving wages. The businesses would provide goods and services to the product market while also employment within the factor market. Finally, the everyday consumer purchases goods and services from businesses and also working elsewhere to receive income. ]]> 2020-11-08 23:38:56 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/902341213 micahvillegas2 https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/902343331 The circular flow model is a great representation of how money keeps our economy flowing. While it is a great representation, it is only a rough outline of our economy as it is not a complete replica of our own economies. This model fails to acknowledge the money that is not accounted for like taxes, and also what effect financial institutions have on our money in this economy.]]> 2020-11-08 23:41:05 UTC https://padlet.com/micahvillegas2/2jqhe98ru79ylp9f/wish/902343331