The Circular-Flow Diagram rms Produce and sell goods and services Hire and use factors of production Households Buy and consume goods and services Own and sell factors of production Harcourt, Inc. items and derived items copyright o 200l by harcourt, IncHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Circular-Flow Diagram Households Buy and consume goods and services Own and sell factors of production Firms Produce and sell goods and services Hire and use factors of production