circular flow model A representation of how the major participants in a market system, primarily households, businesses and government, affect each other through supply and demand in product and factor markets. Related Related Articles: Glossary: businessesGlossary: householdsThe Surprising Minimum Wage Impact at McDonald’sThe Basics of the Pandemic RecessionRenters, Landlords, and the Eviction Moratorium Ann Mills Share This Previous Articlebilateral aid Next Articlecreative destruction December 17, 2020