explain how the circular flow diagram relates to the current economic situation.
Explain how the circular flow diagram relates to the current economic situation. Using the circular flow diagram, explain a way that your family interacts in the factor market and a way that it interacts in the products market. The circular flow diagram relates to the current economic situation since it shows the ways our different markets affect each other. There are two markets, the Resource market and the Product market. âThis model provides an overview of the central concerns of both macroeconomics and microeconomics.