00:01
All right, let's draw a circular flow diagram.
00:02
So how this is going to look is there's going to be firms on one side and households on the other.
00:12
And these guys are going to exchange stuff.
00:16
Then there's the market for factors of production.
00:27
And there's the market for goods and services.
00:39
All right.
00:43
How do these interact? the market for goods and services is going to, i mean households are going to spend money.
00:54
There, right? and then in exchange for goods plus services in terms of the markets for good and services.
01:06
So now, if we're talking about market for factors of production like labor and whatnot, firms need household help.
01:14
So they're going to pay households for helping them out.
01:19
And then households are going to provide factors of production like labor.
01:26
All right.
01:28
So now we have to identify which correspondence.
01:31
To which.
01:32
So if salina pays a, i should capitalize that, my bad, pays a storekeeper, that's going to be this here.
01:44
So households to firms, goods and services...