The economy is an endless cycle of money, and the circular flow model demonstrates how this flow moves through society. Currency flows from producers for product payment to workers as wages. In this video, you'll learn a simple way to understand this concept through an easy and brief explanation. The government sector puts cash into the circle by spending on such programs as Social Security or national parks. Income flows into the circle through the foreign trade sector. Exports bring in cash from foreign buyers. Taxes reduce the flow of income.