<Ol> <Li> The economy consists of two sectors: households and firms . </Li> <Li> Households spend all of their income (Y) on goods and services or consumption (C). There is no saving (S). </Li> <Li> All output (O) produced by firms is purchased by households through their expenditure (E). </Li> <Li> There is no financial sector . </Li> <Li> There is no government sector . </Li> <Li> There is no foreign sector </Li> </Ol> <Li> The economy consists of two sectors: households and firms . </Li> <Li> Households spend all of their income (Y) on goods and services or consumption (C). There is no saving (S). </Li> <Li> All output (O) produced by firms is purchased by households through their expenditure (E). </Li>

In a circular flow diagram who pays for goods and services