Just to begin with, it is prudent to note that the three sector economy like that found in the United States of America is made up of the government, household and the business sector. This type of economy describes the flow of goods and services between the above mentioned sectors of the economy. The following diagram illustrates a typical three sector economy.
Figure 1: Three sector economy
They are the owners of the factors of production such as labour, land and capital. They always receive income by selling the factors for production to the business firms. Therefore purchasing of Continue reading...