Household recived income from firms and
the government, purchase goods and
MI
services from firms, and pay taxes to the government.
They also purchase foreign-made goods and services (imports).
Firms receive payments from households and the government for goods and services; they pay wages, dividends, interest, and rents to households and taxes to the government.
The government receives taxes from firms and households, pays firms and households for goods and services- including wages to government workers and pays interest and transfers to households.
Finally, people in other countries purchase goods and services produced domestically (exports).
Note: Although not shown in this diagram, firms and governments also purchase imports.