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THREE-SECTOR, THREE-MARKET CIRCULAR FLOW: A circular flow model of the macroeconomy containing three sectors (business, household, and government) and three markets (product, factor, and financial) that illustrates the continuous movement of the payments for goods and services between producers and consumers, with particular emphasis on taxes and government purchases. Other circular models are two-sector, two-market circular flow; two-sector, three-market circular flow; and four-sector, three-market circular flow.

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PHYSICAL FLOW

In the circular flow model, the 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 physical flow is usually illustrated as a counter-clockwise flow for a model with the product markets at the top, resource markets at the bottom, household sector at the left, and business sector at the left. The payment flow moves in the opposite direction.

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Today, you are likely to spend a great deal of time at a going out of business sale looking to buy either a handcrafted bird feeder or a New York Yankees baseball cap. Be on the lookout for strangers with large satchels of used undergarments.
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In the early 1900s around 300 automobile companies operated in the United States.
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