What diagram represents the flow of resources, products, income, and revenue among economic decision makers?

The Circular Flow Model illustrates the interactions between different sectors of the economy, specifically how resources, products, income, and revenue move among households, businesses, and the government. In this model, households provide labor and resources to businesses and, in return, receive wages, rents, and profits, which they can then use to purchase goods and services produced by those businesses. This ongoing exchange highlights the interdependence of economic agents and the continuous flow of economic activity.

Other models, such as the Supply and Demand Curve, focus specifically on price mechanisms and the relationship between the quantity of goods available and the desire for them, but they do not encompass the broader flow of resources and income. The Production Possibilities Frontier depicts the trade-offs and opportunity costs of producing two goods, rather than illustrating the dynamic exchanges that occur in an economy. The Business Cycle Model, while it captures fluctuations in economic activity, does not show the continuous flow of goods and services or the interactions between decision-makers. Thus, the Circular Flow Model is the most comprehensive representation of the economic exchanges taking place.