According to the circular flow of income:

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The circular flow of income depicts the flow of goods, services, and money through the economy. In this model, firms sell goods and services to both domestic and foreign consumers, while households provide factors of production such as labor and capital to firms in exchange for income. Governments can also collect taxes from both households and firms to fund public goods and services. Transfer payments, such as unemployment insurance, are typically provided by the government to households rather than by firms. The value of aggregate income may not necessarily equal the value of Gross National Product, as income can be earned from sources other than production such as transfers or investments.

According to the Circular Flow of Income