Money in Motion : Examining the Circular Flow Model as a Tool for Exploring the Interconnectedness of Economic Sectors

The circular flow model illustrates the flow of monetary transactions within a given society. Money flow in an economy is characterized by transferring funds from producers to workers in wages, which subsequently circulate back to producers as payment for goods and services. Results show that an economy can be described as a perpetual cycle of monetary exchange. It reveals how the four main markets that control the flow of money in the national economy interact with the economic sectors. This makes it a valuable tool for understanding the economic context in which businesses work. It focuses on how income and spending work together in a system