PHYSICAL FLOW: In the circular flow, the counter-clockwise transfer of goods and services from the business sector to the household sector and the transfer of resource services from the household sector to the business sector. The payment flow moves in the opposite direction. The physical flow, the physical movement of goods and services, is the foundation of the economy's circular flow. The fundamental problem of scarcity is addressed by physically transforming scarce resources into goods and services that are then used to satisfy wants and needs.

     See also | circular flow | payment flow | goods | services | business sector | household sector | product markets | factor markets | consumption | gross domestic product | factor payments | national income |

PHYSICAL FLOW, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: December 19, 2018].

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An economic model relating the price level and real production that is used to analyze business cycles, gross production, unemployment, inflation, stabilization policies, and related macroeconomic phenomena. The aggregate market, inspired by the standard market model, but adapted to the macroeconomy, captures the interaction between aggregate demand (the buyers) and short-run and long-run aggregate supply (the sellers). Also known by the names AS-AD model or income-price model, the aggregate market is THE cornerstone model of macroeconomic analysis.

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