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Interactions between sectors of the economy can be money flows or real flows. Real flows are actual goods, services and resources flowing from one sector to another, usually in exchange for money through money flows. Households provide labor to producers (a real flow) in exchange for wages (a money flow). Households then use their income as consumer spending (a money flow) in exchange for goods and services from the producer (a real flow).
Almost all interaction between producers and consumers is done through a market, which is a place or situation where exchanges are able to take place with the use of money. Almost everyone in society is involved in markets. Because people either specialize on the production of one good or service or are not involved in any production process, people rely on each other through interactions and exchanges within the economy. This is called interdependence.
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