In the circular flow diagram, labor flows from households to firms.
This is further explained below.
<h3>What is
a circular flow diagram?</h3>
Generally, The circular flow of income, sometimes known simply as the circular flow, is a model of the economy in which the primary economic transactions are represented as flows of money, products and services, and other things between economic actors.
In a closed circuit, the flows of money and things that are traded correspond in value to one another, but they go in the opposite direction.
In conclusion, Within the framework of the circular flow diagram, work is transferred from homes to businesses.
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