The Nature of the Economy



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Introducing the economy

Slides 3 to 6

 introduce students to the concept of 

the economy, also indicating its relevance to their 

own lives. 

The circular flow model 

Slides 7 to 12

 provide an overview of the five 

sectors of the economy (as portrayed in the circular 

flow model). 

Activity idea (Slide 13):

 Students could be 

organised into pairs or groups and given 

Activity: 

Sectors in the Economy

, which contains 

information about the sectors. They could cut the 

sectors out and stick them to a large sheet of 

paper, then discuss and draw in notes and arrows 

to create a diagram showing some of the 

relationships between them (e.g. arrow between 

Households and Government to represent taxation; 

arrow between Households and Firms to represent 

consumption). You may wish to show the words on 

Slide 2


 again as prompts. After their group work, 

they could share ideas with the class.   

Slide 14 

contains the circular flow model including 

arrows. The diagram is also shown in 

Illustrator: 

Circular Flow Model

, with more detailed description. 

Students can compare the completed model with 

the diagrams they have drawn themselves. Were 

there any relationships that they missed?  


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