Households and Businesses

Explain what each provides to the other.

Warm-up, learn, try it together, practice, then a quick check. About 15 minutes.

What children learn in Level 41

The Depression showed how everyone in the economy depends on everyone else. Let's see how. Economists talk about four big groups, called sectors.
A household is the people who share a home, like your family. Households own the most important resource of all: their own labor.
Households sell labor to businesses, and earn wages. Follow the arrows.
Then households spend those wages on goods and services, so money flows back to businesses. Those people are consumers. Round and round it goes.
That's why the Depression spread. When people lost jobs, they bought less. Businesses sold less, and let more workers go.

Georgia Standards of Excellence in Social Studies:

SS5E2.a — Describe the household function in providing resources and consuming goods and services.
SS5E2.b — Describe the private business function in producing goods and services.