How do I make a circular flow diagram?

Describe the sectors you need (households, firms, government, banks, foreign sector), the flows between them, and any labels you want highlighted. Figviz draws the diagram and labels every arrow. You can refine the prompt to add or remove flows, then download the result as a PNG.

Is the circular flow diagram generator free?

Yes. Every account starts with free credits you can use right away. Purchasing a pay-as-you-go credit pack removes the watermark and unlocks higher output resolutions. Credits never expire.

What is the difference between a two-sector and a five-sector model?

The two-sector model includes only households and firms and shows the basic income and expenditure loop. The three-sector model adds government with tax and spending flows. The five-sector model adds financial institutions (savings and investment) and the foreign sector (imports and exports), giving a complete picture of a modern open economy.

What flows in each direction in a circular flow diagram?

Money flows (wages, consumer spending, taxes, loan repayments) conventionally run clockwise. Real flows of goods, services, and factors of production (labor, land, capital) run counter-clockwise. Labeling both directions clearly is the key to a readable circular flow diagram.

Can I use the circular flow diagram generator for an economics class?

Yes. Figviz is well suited for economics coursework, lesson slides, and printed worksheets. You can generate a labeled model to illustrate a concept or a blank template for students to fill in. Download at up to 4K resolution for crisp printing. Diagrams from paid accounts can be used in your own teaching materials.

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Circular Flow Diagram Generator Circular Flow Diagrams

Describe any circular flow model and get a clean, labeled economics diagram in seconds. Money flows, goods and services flows, government spending, financial markets, and the foreign sector, all drawn and labeled for you.

✓Two-sector to five-sector models✓Labeled money and goods flows✓Government and foreign sector✓Slide and print readyLast updated: 2026-06-21

Circular Flow Diagram Examples

Browse circular flow diagrams made with Figviz, or generate your own above

Two-Sector Circular Flow

The basic two-sector model with households and firms exchanging goods, services, and factor payments.

economicstwo-sectorhouseholds

Labeled Money and Goods Flows

A detailed two-sector diagram with every arrow labeled to distinguish money flows from real flows.

economicsmoney flowgoods flow

Three-Sector Model with Government

The three-sector model showing households, firms, and government with taxes and government spending.

economicsthree-sectorgovernment

Five-Sector Model with Banks and Foreign Sector

The full five-sector model adding financial institutions and the foreign (overseas) sector.

economicsfive-sectorbanks

Blank Circular Flow for Worksheets

A printable blank circular flow template with boxes and arrows but no labels, for student practice.

economicsworksheetblank

Circular Flow of Income

A simplified circular flow of income showing the income loop and the expenditure loop between households and firms.

economicscircular flow of incomeincome

Prompt templates you can copy

Start with one of these examples, then adapt the subject, labels, data, or layout for your own use.

Two-Sector Circular Flow

The basic two-sector model with households and firms exchanging goods, services, and factor payments.

Create a labeled two-sector circular flow diagram with households and firms. Show the product market at the top and the factor market at the bottom. Arrows: wages and rent from firms to households (factor market), labor and land from households to firms (factor market), consumer spending from households to firms (product market), goods and services from firms to households (product market). Classic textbook style. White background.

Labeled Money and Goods Flows

A detailed two-sector diagram with every arrow labeled to distinguish money flows from real flows.

Create a detailed circular flow diagram for a two-sector economy. Clearly distinguish money flows (wages, profits, consumer spending) shown with solid arrows clockwise, and real flows (labor, goods and services) shown with dashed arrows counter-clockwise. Label every arrow. Colorful style with two colors for the two flow directions. White background.

Three-Sector Model with Government

The three-sector model showing households, firms, and government with taxes and government spending.

Create a labeled three-sector circular flow diagram with households, firms, and government. Show the standard two-sector flows plus: taxes flowing from households and firms to government, government spending and transfer payments flowing back to households and firms, and government purchases of goods and services from firms. Classic textbook style, clear boxes and arrows. White background.

Five-Sector Model with Banks and Foreign Sector

The full five-sector model adding financial institutions and the foreign (overseas) sector.

Create a labeled five-sector circular flow diagram with households, firms, government, financial institutions (banks), and the foreign sector. Show savings flowing from households to banks and investment flowing from banks to firms, plus exports flowing out and imports flowing in through the foreign sector, and all tax/spending flows for government. Colorful style, each sector a different color box. White background.

What is a circular flow diagram?

A circular flow diagram is an economics model that shows how money, goods, and services move between the key sectors of an economy in a continuous loop. In the simplest two-sector version, households supply labor and other factors to firms through the factor market, and firms pay wages and profits in return. Households then spend that income on goods and services in the product market, which flows back to firms. Figviz generates a labeled diagram from a plain description of the model you need, so you get a clean, export-ready circular flow without drawing boxes and arrows by hand.

How to make a circular flow diagram

Decide which sectors to include: two-sector (households and firms), three-sector (add government), or five-sector (add financial institutions and the foreign sector).

Identify the flows: money flows (wages, taxes, spending) run clockwise, while real flows (labor, goods and services) run counter-clockwise.

Describe the model in plain language in the prompt box, naming the sectors and any specific flows you want labeled.

Choose a style (classic, colorful, or minimal) and your preferred aspect ratio, then generate.

Download the PNG for slides or print, and refine the prompt if any label needs adjusting.

Sectors and flows explained

Households: supply labor, land, and capital to firms; receive wages, rent, and profits; spend income on goods and services.

Firms: hire factors of production from households; pay factor incomes; sell goods and services in the product market.

Government (three-sector model): collects taxes from households and firms; injects spending, transfer payments, and public services back into the economy.

Financial institutions (four-sector model): receive household savings; channel them back as business investment loans.

Foreign sector (five-sector model): households and firms buy imports (a leakage); domestic firms sell exports (an injection), connecting the domestic economy to the rest of the world.

Tips for a clear circular flow diagram

Label every arrow with a short phrase (wages, taxes, consumer spending) rather than a symbol, so the diagram reads on its own without a legend. Use color to separate money flows from real flows when printing in color, or use solid and dashed lines when printing in black and white. For a worksheet, generate the blank template and print it at A4 or letter size so students have room to write. If the five-sector model looks cluttered, try the 16:9 landscape ratio for more horizontal space between sector boxes.

Frequently asked questions

A circular flow diagram generator is a tool that draws a labeled economics circular flow model for you. With Figviz you describe the sectors and flows in plain language, and the AI produces a clean diagram with boxes for each sector and arrows showing money and goods flows, ready to download in seconds.

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