The Economic Circuit Explained

Your spending is literally someone else's paycheck. The entire economy is just one giant

loop. Think of the main players: households like you, companies,

and the government. You work and earn a salary. Then you spend that money on goods and

services. That cash becomes a company's revenue, which they use to pay their employees.

The government collects taxes from everyone and uses it to provide public services. It’s a constant

flow of real stuff and money between all these groups. This whole system, called the economic

circuit, even includes what we buy and sell with other countries.