Real flows consist of flow of factor services from households to firms, and the reverse flow of factored services (market 1) from households to firm, and the reverse flow of goods and services from firms to households market 4).

Whatever the firms produce is consumed by the households.

Money flows consist of flow of factor payments that households receive from firms in return for the factor services extended to firms (marked 2), and the reverse flow of consumption expenditure from households to firms on the goods and services purchased format the firms (marked 3); consumption expenditure will equal the sum total of factor payments.

And since all that is produced in the economy is consumed, the real flows of production and consumption of firms and households shall equal the money flows fo income and expenditure of firms and households.

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