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Circular Flow
1
6.01 Economic relationships - Transportation
Written by Percy Lefavor
Government
Government
How do businesses and the government interact?
Businesses
The government buys vehicles for government officials, and buys parts for those vehicles when they break down, as well as materials for the DOT to maintain railways and roads.
What does the government get from the rest of the world?
The government buys gas from other countries, and imports vehicles for businesses to sell.
The rest of the world
Households affecting the government
HouseHolds
The government provides a safe way to travel or road or through public transit, so households pay taxes, buy bus tickets, or pay tolls on the highway to help maintain each item.
HouseHolds
HouseHolds
What does the rest of the world do?
The rest of the world
The rest of the world imports items to the country for households to be able to buy from businesses and the government, thus providing each party with more money to maintian the transportation system.
How does the government interact with households?
Government
The government charges each household a tax in order to maintain roads for members on the road, and also sells the public gas to fuel their tanks. The government also provides public transit to households.
How do houseHolds help businesss?
Businesses
Households invest into businesses in sign of belief that the company will provide for them, and in return businesses provide stocks. Businesses also sell gas, cars, and car parts to households.
Rest of the world
Businsses, public markets, and finances
Businesses
the public market in the rest of the world
The rest of the world
The US is consistently importing vehicles and exporting vehicles to different countries, as well as gas, car parts, and metal to make those car parts as well.
Government and the financial market
Government
The financial market typically loans out money to the government for them to be able to pay for the projects that they want to be able to do, and then the government pays back those loans to the banks and the businsses,
Households and their relationships with business
Households
Businesses provide households access to stocks, which in return, provides money to the business. Households also buy product from businesses, such as gas for their vehicles, parts for their cars, and the ability to buy vehicles in general.