One of the most basic models of the economy is:

Question

Quizplus · Accepted Answer

The circular flow diagram is a basic model of the economy that shows the interactions between households and firms through the markets for goods and services and the markets for factors of production. It is considered to be a fundamental concept in economics and is often used to introduce students to the study of the economy. Real GDP per capita, the current population survey, and consumer expenditure are all important economic indicators, but they are not basic models of the economy in the same way that the circular flow diagram is.

One of the Most Basic Models of the Economy Is