Develop The Concepts of The “Circular Flow” of Goods and Services
In a 1-2 page paper develop the concepts of the “circular flow” of goods and services. Begin by reviewing this video: Circular Flow from the St. Lois Federal Reserve.
Select one good you are familiar with. Describe how the goods move in relation to:
Starbucks Corporation is an American coffee company and coffeehouse chain that sales espresso coffee drinks and other beverages such as fruit juice and iced cocoa macchiato.
Households
Starbucks buys goods and services such as labor(to work at the store), coffee beans(to make espresso coffee drinks), land(to open a store), and cocoa beans(to make the iced cocoa drinks) from households. The labors who work at the coffee store making coffees and provide services to customers are from households, and coffee beans come from farmers who plant coffee trees, is also come from households. The land for Starbucks to open a store can be owned by a company or individuals, and both of the two are related to households. These costs of production have many different types such as human resources, physical equipment or even knowledge and information.
Starbucks sales goods and services such as espresso coffee drinks, provide a place to stay, and iced cocoa drinks to households. The customers are from households, and they buy espresso coffee drinks and enjoy it inside a store or pick it up to any other places. Starbucks sales multiples service to customers such as a comfortable environment to stay and enjoy coffee, a table to put your bag on, a chair to sit down, and free internet to use. Although customers are not straightly paying for the place, they also pay it when they buy the drink.
Suppliers of goods and services
Suppliers sales goods and services such as land, coffee beans, water, espresso machine, tables and chairs to Starbucks. The suppliers pack and transport the coffee beans to the stores for them to make coffee drinks. The supplier sales well-designed coffee machines to Starbucks for them to provide excellent coffee drinks. The chairs and tables are also from suppliers who build them. The utility company is the supplier of water and electricity for making drinks and lighten the stores. Starbucks also purchase their uniforms from the supplier for their employees to wear when they working at the store.
The suppliers buy goods and services from other suppliers or households such as labors, raw materials, and trucks. The labors work at the suppliers' factory and office to build or design the coffee machine, and the truck driver delivers the equipment to Starbucks' store. The delivery service might supply by another supplier that being paid to do the delivery.
Money
When Starbucks sales coffee to a customer, the money flows from the customers to Starbucks, and the goods and services flow from Starbucks to the customer. Similarly, while the supplier sales goods and services such as land, coffee beans, water, espresso machine, tables and chairs to Starbucks, the money flow from Starbucks to the suppliers, too.
The money that flows to Starbucks or suppliers does not stop from flowing. Starbucks uses the money to pay the checks for labors' salaries, buy new or maintain the equipment and decorating the store, purchasing coffee beans in order to keep running its business. The suppliers use the money to pay the checks for labors' salaries and buying new or maintain the equipment, either.
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