What is the difference between a circular flow model and an inputoutput model?

What is the difference between a circular flow model and an input-output model Introduction: Unraveling the Complexity of Economic Systems Hello everyone! In the realm of economics, understanding the intricate workings of an economy is a fascinating endeavor. Today, we will delve into two widely used models - the circular flow model and the input-output model. These models provide us with a structured framework to comprehend the various components and interactions within an economy. While they share certain similarities, they also possess distinct features. So, let's embark on this journey of exploration and comparison! The Circular Flow Model: A Macroscopic Perspective The circular flow model, often attributed to economist John Maynard Keynes, offers a macroscopic view of an economy. It portrays the flow of goods, services, and money between households, businesses, and the government. At its core, the model consists of two sectors - the household sector and the business sector. The household sector supplies factors of production, such as labor, to the business sector. In return, the business sector provides goods and services to the households. This exchange is facilitated by the flow of money. Additionally, the government sector plays a crucial role by levying taxes, providing public goods, and managing the overall economic environment.