Circular Flow of *Econoland*

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Circular Flow of “Econoland”
Understand and analyze the circular flow model and it’s components
ES: C-4 and IR-7
Procedure:
“What Goes Around Comes Around”
 15 minutes to engage in the simulation
 Households: Sell your factors of production to firms/Buy “ECONOS”
 Firms: Buy factors of production from households/Sell “ECONOS”
 Read instructions on handout “Activity 10.1”
 Goal:
 Households: Acquire as many “ECONOS” as possible
 Firms: Acquire as much money as possible
Winners from each group will receive an extra credit point on Test #1
ECONO-FACTORY
Conclusion:
How do individuals and families in households
depend on people in businesses?
How do businesses depend on individuals and
families in households?
What is the role of government in the circular
flow of economic activity?
Summary:
The value of output equals value of income
generated
Output and input are linked
Output and employment are linked
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